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Thursday, 10 October 1985
Page: 1040


Senator BUTTON (Minister for Industry, Technology and Commerce)(9.45) —The Government does not support these amendments for reasons that I have indicated to Senator Vigor and to which I referred briefly in the course of the second reading debate. These amendments provide an option for the export earning cut-off point to be $60m averaged over three years immediately preceding the grant. This would involve additional expenditure in the early years of the scheme. I give as an example a firm with export earnings of, say, $25m. It could be eligible because its exports in the three preceding grant years did not exceed $60m. The Department of Trade has analysed the scheme and I am told that generally speaking firms with large export earnings are entitled to the maximum grant of $200,000, so it would not take many firms in this category to lead to a not insubstantial increase in the cost of the scheme. The Department's research showed that less than 5 per cent, or some 300 claimants-generally the large exporters-were receiving almost one-third of the total EMDGs. That was one of the factors leading to our amendments to the scheme. The very fact that these amendments are designed to allow some claimants to continue in the scheme when they would otherwise be excluded surely indicates that the amendments will add costs to the scheme.

I refer again-quite apart from that example-to the administrative costs that would be added to the scheme because of the checking and validation of export earnings which would be required over three years rather than over one year as in the scheme proposed in the legislation. As I said in the second reading debate, in terms of allocation of Government resources and finances one is entitled to expect that a firm with export earnings of $20m or more can surely stand on its own feet. It will be less comfortable standing on its own feet under the revised scheme, but it is still surely possible for it to do so. I am told that the after-tax value of a $200,000 EMDG represents only 0.54 per cent of export earnings of $20m. Those figures are important in order to see the parameters of Senator Vigor's proposal. For those reasons the Government cannot accept these amendments.

Question put:

That the amendments (Senator Vigor's) be agreed to.