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Wednesday, 6 June 2001
Page: 27361

Mr PROSSER (11:17 AM) —I rise in the House today to support the Export Market Development Grants Amendment Bill 2001. The bill has a number of provisions which make the Export Market Development Grants Scheme, or EMDG, more flexible. However, the bill's most important function is that it extends the scheme for another five years. The EMDG Scheme was set to end, with the final grant year under the existing legislation being 2001. The extension of the program for another five years to 2005-06 follows the review conducted by the Austrade board, with advice from Professor Bewley of the University of New South Wales and from PricewaterhouseCoopers. The scheme provides support to business with funding for international promotional activities, by partly reimbursing the expense that eligible businesses incur in promoting the goods and services they want to export. World markets are extremely competitive and, as consumers from all countries become more discerning and are faced with more complex choices, it is important that Australian firms have the opportunity to promote their goods and services internationally.

The EMDG review found that the scheme encourages business to seek and develop export markets. The barriers to export are often great and include finance, cultural barriers, Australia's isolation and remoteness geographically from other nations and a lack of knowledge about exporting opportunities, just to name a few. These obstacles increase the cost and time to enter into export markets and sometimes act as a deterrent.

Australia is a great trading nation. For the past five years Australian exports of goods and services have grown on average about 17 per cent. Exports of goods and services account for some 19 per cent of our gross domestic product—an increase of four per cent since the mid-1980s. This reflects diversification of exports and a shift to leading edge manufacturing and services.

Australian businesses are working harder and smarter. I saw a fabulous advertisement on an Ansett flight back to Perth just the other day. It was done by a group of business consultants. Essentially, the scene is the running of the bulls, except that it is not bulls that are chasing down and injuring the runners but squirrels. One runner, clearly overcome, says at the end of the ad, `The squirrels are quick and even though they are small they cannot be underestimated.' I think that Australia's SMEs are in much the same position. We have many competitive advantages in Australia, and it is important that we as a government support our SMEs, and the EMDG Scheme is one effective way of doing that. The EMDG Scheme delivers about 3,000 grants per year, averaging some $45,000 for smaller firms. As a regional member, I am delighted that 21 per cent of these grants go to regional and rural Australia.

In my own electorate of Forrest, in the 2000 grant year 13 firms shared in $362,562 of EMDG funding. Many members would realise that my electorate is perhaps the most famous for its wine, with winegrowing regions such as the Margaret River and the new region of Geographe. I am sure it is no surprise that some smaller wineries in my electorate are receiving these grants. Other south-western firms have also received funds—firms involved in engineering, sporting goods, meat products, tourism, pharmaceuticals and toiletries. Over the last five years, 34 businesses in my electorate have received $3,359,000. For every dollar paid in EMDG grants, $12 in additional exports is created and therefore it is not unfeasible that there has been a boost to exports in excess of $40 million. This is good for all communities in the south-west of Western Australia.

This amendment bill has a number of important provisions which I believe will prove popular with those small businesses in my electorate seeking to develop export opportunities. The provision to lower the minimum export requirement from $20,000 to $15,000 should improve access to the scheme by smaller firms. Reducing from five years to one year the period that family members need to be employed in the business before travel expenses are reimbursed should also be of great benefit to many small business owners. Small businesses are built on the foundation of hard work and sacrifice of a family unit. The bill also seeks to remove the provision that first-time applicants must register their intention to lodge a claim for a particular grant year. Currently, applicants must register their intention to apply for a grant by 30 June of the relevant grant year. This was to ensure that applicants received education and to ensure the efficient administration of the scheme. However, as with most things designed to serve administration, it has often proved to be inconvenient for those seeking to utilise grants. The end result was that those who missed the cut-off date could not be considered for funding despite the likelihood that they would have been eligible. This represented lost opportunities for businesses, for the communities in which those businesses operated and ultimately for Australia.

These three initiatives alone will mean greater access for and be of particular benefit to regional businesses such as those in my electorate of Forrest. Austrade will still conduct a first-time registration and education program, but it will now be on a voluntary basis. Australian businesses, if they are to compete effectively, are required to be flexible, and Austrade, which delivers government support to these businesses, should be no less so.

The bill also seeks to remove the requirement that expenses claimed by consultants should be only for short-term consulting arrangements, merges the consultants' expenses category with the overseas representation category and limits the combined eligible expenses to $250,000 for a grant year. Applicants will be able to amalgamate two years expenses, with a limit of $250,000 for combined expenses in the grant year and the year preceding it. This will be of benefit to many businesses engaging consultants on a long-term basis and those incurring costs above the previous $200,000 cap. The trade fairs expenses category will be expanded to include seminars, in-store promotions, international forums, private exhibitions and similar promotional events. The Hon. Clive Griffiths, a previous Agent General for Western Australia in London, was a driving force for organising in-store promotions of Western Australian products. These in-store promotions exposed Londoners to the freshness and outstanding quality of Western Australian produce, including food and wine, and resulted in a boost in trade from Western Australia.

The bill seeks to focus EMDG funding on small business by requiring turnover to be less than $25 million, provides increased flexibility for the time in which applicants for EMDG funding provide further information to Austrade, streamlines insolvency provisions and requires EMDG applicants seeking funding to hold an Australian business number. The increased flexibility and the extension of the Export Market Development Grants Scheme—combined with the new business tax system, under which exporters are not taxed like they were under the wholesale sales tax system—show that the government is committed to exporting businesses and ultimately mean that Australian exporters can now be more competitive. If you have competitive exporters, it means you get results such as the first trade surplus since 1981, which was recorded in the June quarter. This has great benefit to those businesses who are exporting, to the employees of those exporting businesses and ultimately to communities such as those in my electorate who support these export successes.

I do not think there would be anyone in the south-west who would not be proud of our local businesses shining on the world stage. This brings me to the subject of world trade and globalisation. Our lives are at a very fast pace these days and there is a temptation to try to make the world stand still or slow down so that we can catch up. Many people want to get off the treadmill. Globalisation is a buzz word; it does not mean much, and many people have their own understanding of it, but it has become a label that people use to express what they think is wrong with a whole range of issues. Barely anything is ever said about the flip side of the so-called globalisation issue—the importance of the role of exporters in my communities in the south-west, and indeed in communities across Australia, and the contribution they make. I want to place on record my support for the Minister for Trade in his efforts to increase the profile of exporters in Australia and knowledge of their importance to our economy. I think the key to a happy medium is to explain and to have an open dialogue and a constructive dialogue about these important issues, without ridicule from either side. It is a testament to the robustness of our democracy that we can have a debate on these issues.

Finally, I want to place on record my admiration and congratulations for all those firms in the south-west exporting their goods and services to the world, taking advantage of excellent economic conditions provided by the federal government, such as lower interest rates and lower taxes. Our exporters are helping to build our communities, and assistance such as the Export Market Development Grants Scheme is worthy of support. The exporting success of Australian companies is very well known. The role of many small firms in my electorate and many other electorates needs to be commended. People in them work hard and try hard. We need to get our products into many markets. Australia has a reputation of being clean and green, and we should build on that. We have great opportunities in world markets, but we need to promote the good things we do and get them into the markets.

I commend the Minister for Trade for the work that he has been doing to get access for our products to many world markets—world markets that we were previously locked out of. We now have a great focus from this government and this minister to be able to penetrate those markets, to gain access to those markets for our produced goods, for our export goods. Many successes in regional Western Australia, whether it is in furniture manufacturing, cheeses—as my colleague previously mentioned—wine exports or other food products, are helping to generate jobs in regional areas and export growth for Australia, with great input to jobs and communities. I commend the bill to the House.