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Wednesday, 6 June 2001
Page: 27379

Mr BARRESI (12:58 PM) —Today in this debate on the Export Market Development Grants Amendment Bill 2001 I wish to address the important issue of promoting and expanding Australian exports. As we know, exporting and exporting endeavours mean much to our nation. It did not take too many years following white settlement before locally produced goods were leaving our shores. Over many years and subsequent generations, our economic prosperity has been built on agriculture and minerals: to repeat the old cliché, off the sheep's back and out of a quarry. This led to a very high standard of living for many Australians at the turn of the 20th century. Just like 100 years ago, we in Australia now, at the beginning of the 21st century, have many possibilities ahead of us. Even with a range of external factors that are well beyond our control, it is still fair to say that Australians and Australian businesses have many opportunities open to them.

Australians have always responded to a challenge, whether it is fighting a massive bushfire, dealing with drought or flood relief, or attempting to make something out of nothing—that is, creating wealth and prosperity out of a dream. It is this last point which is the theme I want to pursue today. In the year in which we celebrate the nation's 100th birthday, we must also celebrate our economic successes, our export successes and appropriately look to the future.

According to a very good publication prepared by Austrade, the value of recorded trade in 2000 increased by 21 per cent to $227.4 billion. Exports rose 27 per cent to $110.4 billion and imports rose 15 per cent to $116.9 billion. Between 1995 and 2000, total trade increased at an average rate of eight per cent per year. While this includes imports, it highlights the significance of Australia as a trading nation. Our merchandising exports have increased at an average rate of eight per cent per annum over the same five-year period. Our exports of primary products increased by 34 per cent, exports of manufactures rose by 20 per cent and other exports rose by 15 per cent. Passenger motor vehicle exports exceeded $2 billion for the first time, increasing by 41 per cent to $2.3 billion. We are exporting cars. Many years ago very few people would have given Australia any hope at all of being a motor vehicle exporting nation. But here we are, due not only to bills such as this Export Market Development Grants Amendment Bill 2001 but also to various other programs that this government has introduced for the motor vehicle industry over a number of years, helping to create a very viable industry that we can all be very proud of with many spin-off effects to other businesses and suppliers down the line.

The EMDG Amendment Bill continues the coalition government's commitment to boosting Australian exports. The coalition's most significant change of recent times has already contributed to a massive growth in exports. The new tax system ensures Australia's exports are GST free. This can only increase their competitiveness and affordability overseas. Also, we have seen reductions in diesel costs reduce the cost of manufacture and of transporting much of our merchandise exports. Once passed, this bill will ensure that the EMDG Scheme will continue for another five years as well as making a number of other important improvements.

The scheme is making a real impact on the export efforts of 3,000 Australian businesses each year. Last year, 700 of those received a grant for the first time. I know that there will be those out there who will decry this as some sort of corporate welfare, that we are helping businesses to get their services overseas. One of the reasons why we are helping these businesses is that, when combined, they produce $4.5 billion in exports and employ around 54,000 people. With $150 million to be spent each year, the EMDG Scheme is achieving its objective of providing effective assistance to businesses seeking export markets. These businesses are playing on the world stage; they are not large businesses by any means. Eligible businesses must have a turnover threshold of less than $50 million per year. The fact that the Commonwealth government can assist them with a partial reimbursement of their marketing expenses has made, and is making, a difference in their business plans.

Let us have a look at some of the characteristics of the EMDG applicants. Of small businesses, 90 per cent have export earnings under $5 million, 70 per cent have a turnover under $5 million and 65 per cent have fewer than 25 employees. In terms of money on the ground, in the 1999-2000 year Victorian firms alone received almost $34.5 million, and firms in Melbourne's eastern suburbs—an area which I represent—have received just over $736,000 in the current year. These are businesses that are taking Australian knowledge, Australian exports and Aus-tralian services overseas and are certainly making us proud of their endeavours. These are businesses that continue to employ people and, through their growth, we will have further employment for the eastern suburbs of Melbourne.

They are also businesses that do not have the luxury of multimillion dollar infrastructure and a hundred years of established service, they are businesses that often have been created because of one or two people's dreams—people who have gone out and taken a risk and all they have asked for is some form of assistance from the government. Yet there will be those in the community, including in my electorate—as I am sure there are in the electorates of most of the members in this House—who would believe in the myth that if you are an exporter there is no assistance at all from the federal government. Of course, that is not true at all and the EMDG Scheme is a good example, a tangible example, of that, let alone some of the less tangible assistance that is provided, as I mentioned before, through tax change, through diesel costs being reduced and by making transport and shipping far more affordable.

In the Deakin electorate we have some good examples of businesses that have been assisted. Daniel Robertson of Nunawading received $10,000 for ceramics; Ecotech of Blackburn, $39,000 for industrial machinery and equipment; Frameco of Mitcham, $60,000 for textiles, paint and other building supplies; and Parker Health Care, again of Mitcham, $16,000 for industrial and medical equipment. These are just a sample of those business which have received support.

Last month, I had the pleasure of hosting a visit to the Deakin electorate of the Minister for Trade, the Hon. Mark Vaile. As you will know, the job of any trade minister—no matter what side of politics they may be on—is to go out and sell Australia to the world. It is very rare to find a trade minister actually visiting the suburbs of our major capital cities, but I managed to tie down the minister for an hour or so to come out to Deakin and to speak to some of the local exporters in the electorate. I was very pleased that he was able to join with me in an informal boardroom meeting hosted by Pronto Software in East Burwood. The minister was able to hear first hand the stories of a number of eastern suburbs exporters, and their stories are ones that I as a federal member am very proud to be able to recount here in the chamber today.

One firm, Showers International, is in the business of lighting and display equipment. In this particular industry segment, they are the firm in the world with a web-based e-commerce strategy. It enables their customers and potential customers to make inquiries and to deal with Showers International from anywhere in the world.

Another company is using EMDG to develop export markets to the United States. The firm of Daniel Robertson, which I mentioned earlier, is a renowned producer of quality ceramic products. It has been exporting for 12 years. Many of its products go to Japan. We are selling Australian ceramics to Japan. Bricks and tiles dominate the building industry, and it is now focusing on moving its products into the United States, breaking into the US market. The EMDG money is helping with that expensive and risky process which will, hopefully, lead to a doubling of export revenue.

Another firm has recently signed a major deal with a very well-known European vehicle manufacturer. MoTec's products will be used in the Group A touring cars which will roar around Canberra's streets over the coming long weekend. MoTec's engine management systems are world-class technology. Even though it is a relatively small firm with only 29 employees, MoTec produces the software and hardware controlling the engines of the cars racing at Le Mans. Its owner, Richard Bendall, is determined that his firm—and Australian businesses—will continue to produce high-quality products that are in demand from various customers around the world. MoTec, like so many other Australian exporters, competes with very sizeable firms that dominate particular sectors or industries. In many cases, its potential customers need to be convinced that they can source quality products from Australia and, more importantly, that Australia has the know-how to produce high-tech products. I am glad to say that MoTec is proving them right and doing a great job in a very specialised area of sport.

At the meeting, the company representatives also raised some very valid concerns, which I will share with the House today. The tariffs applied by various overseas countries on our exports—and other market access issues, such as transportation costs—were viewed as being impediments to productive and profitable exporting. I am pleased to see that, through this government and through this minister, we continue to place pressure on overseas nations to reduce their tariff barriers, as we have been doing over a number of years.

RFI Industries make radio frequency equipment. They export to Singapore, Hong Kong and Korea. I hope the managing director, Kingsley McRae, will be pleased with the changes to the EMDG eligibility criteria. They are changes he certainly has been calling for. Overall, all these company representatives had positive stories to tell, and ongoing export success. All present had used the EMDG in a very successful manner. Some commented, not unexpectedly, that the EMDG amounts could be higher and could be available earlier in the export market development process. I know that the minister went away from the meeting better informed and, importantly, having a better understanding of the experiences of the businesses of Melbourne's east.

Over many years, we have seen other grant recipients in the Deakin area. I do not have time to go into all of them today, except to say that each of them has been greatly helped by the scheme, and I know that they continue to survive and prosper as local businesses employing local people in their firms.

Once again, this parliament is debating legislation that is important for Australia and important for my electorate. Unfortunately, there is no coherent or sensible approach being adopted by the opposition, although I do welcome their support of this Export Market Development Grants Amendment Bill 2001 today. However, we do hear one thing that Labor are very good at. We hear it time and again in this chamber. That is the repetitive cry, `We promise to do it better next time.' That is becoming a repetitive mantra which we are hearing all too frequently these days. I wish they would tell Australians how they might do this better. We will await the details in due course. Unfortunately, even on the important issues surrounding export promotion, as with most other policy issues before this parliament, Australia's electors are labouring under a veil of policy vagueness and secrecy from the opposition.

Ironically, only recently the opposition have sought to criticise the government for not spending enough on export promotion and marketing. It is very easy to talk, and Labor had 13 years in government. They believe they will be in government again after the next election, and they say they will be spending millions more on export promotion. Talk is cheap, and one sometimes wonders where the money will come from. Some think that rolling back the GST sounds good, but what does it actually mean? Perhaps in the case of EMDG it may mean removing the GST-free status from exports as a means of funding many of the promised changes and the programs that are going to need to be funded. For some it may be a good policy idea—one more way of raising more GST—to once again tax exports. I can hear it being said in the corridors of Labor: `After all, it will not hurt ordinary working men and women.' I can hear them saying, `Australians do not buy exports. It does not matter if they are more expensive.' I can anticipate the headline now: `Labor's new policy: making the rest of the world pay its fair share'.

Looking at it another way, Labor may as well say of its priorities for government, `We want to reduce the competitiveness of Australian businesses.' Of course, I am sure the member for Melbourne will be out there saying, `That is not at all what we are going to be doing. We are going to be able to achieve everything and juggle all the balls in the air at the same time and not have any of them crashing down onto the floor.' While Australians wait for Labor to adopt a constructive attitude to public policy, the coalition is getting on with the job of making Australia a better place to secure our future. The coalition has a good record of helping Deakin based exporters to make a real go of it on a very competitive world stage, as I have already outlined.

Last year the Austrade board conducted a comprehensive review of the scheme, featuring broad industry consultation, a survey of the scheme's clients, and independent analysis by a respected university professor. Industry submissions overwhelmingly supported the continuation of the scheme. Professor Bewley concluded that, in 1997-98, $133.7 million provided in grants resulted in $135 million in additional export promotion and this resulted in an estimated $1.69 billion in additional exports for Australia. That is an incredible return on outlay—one which is real testimony to the ingenuity and the hard work of Australian exporters.

The review reported that the scheme was an effective way to encourage Australia's smaller businesses into export and recommended that the scheme be extended for another five years. The government has decided to accept most of the review findings and to implement them through the Export Market Development Grants Amendment Bill 2001, which we are debating. It extends the scheme by five years, with a review to be completed by 30 June 2005. It is the coalition that is providing certainty for Australia's exporting community.

This bill reduces the $20,000 minimum expenditure threshold to $15,000, while providing for a $2,500 minimum grant. This provides small businesses which are just starting to export with better access to the scheme and an incentive to increase their export market efforts in future years. It also removes the restriction that consultants must be short term only, merges the overseas representation and consultants category and caps them at $250,000. Accordingly, grants claimants will have greater flexibility in the range of activities that they may undertake and claim grant in relation to.

The bill broadens the EMDG trade fairs category by including seminar costs, in-store promotions, et cetera—again, recognising that our exporters often need to promote their products through events which are similar to but not the same as traditional trade fairs. This legislation, as amended, will also provide for the payment of EMD grants to businesses that promote attendance by foreign residents at conferences, meetings, conventions, exhibitions and sporting, cultural and entertainment events held in Australia on behalf of the owners of these events. It extends the range of export promotional expenses which are eligible under the EMDG Act to include transport, accommodation and meal expenses incurred in relation to the visits of overseas buyers or potential overseas buyers to Australia. This provides for better support for businesses that need to invite potential buyers to Australia to showcase their products and services, and Australian ingenuity in the security of buying from Australia.

Very importantly, under this amendment the requirement that first-time claimants must register with Austrade before applying for a grant will be removed. The bill also introduces a number of technical amendments which I will not go into this afternoon as I am sure they have been covered by other speakers. Overall, the EMDG bill is one which I am pleased has received unanimous support from both sides of the political spectrum. The coalition parties—the Liberal and National parties—have demonstrated through this bill and various other measures that we have introduced for local businesses that we are the parties which best represent Australian businesses, their owners and employees. We are committed to promoting exports as this means jobs and wealth for Australians. The scheme has been a great success and I look forward to hearing reports of the continuing success of those Deakin businesses which are exporting their products and services to the world. I commend the amendments to the House.