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Thursday, 28 October 1993
Page: 2829

Senator CHAPMAN (9.53 p.m.) —In handling the Export Market Development Grants Legislation Amendment Bill 1993 for the opposition, I indicate at the outset that the Liberal and National parties will support its passage.

  However, what we do not support is a broader issue pertinent to Australia's trade and indirectly to the aims of this bill—that is, the Prime Minister (Mr Keating), strutting around the world stage at the Cyprus Commonwealth Heads of Government Meeting, when he was merely a stone's throw from the Arab world which is a significant export market for Australia that could be further developed. Australia's exports to the Arab nations are currently around the $3 billion mark, and to Israel we export a further $ 1/4 billion worth of goods. But has the Prime Minister, while in that region, bothered to visit any of these, our major customers, in that area? No, he certainly has not. Indeed, there has not been a ministerial visit to the Middle East since the March election. Even Senator Cook, the Minister for Trade, has ignored this very important region. I will say a little more about this matter later in my remarks.

  The key amendments proposed in this bill relate to three distinct areas. Firstly, the treatment for the purpose of export market development grant eligibility of expenditure incurred by corporations and individuals under insolvency administration; secondly, the exclusion from grant eligibility of persons with certain convictions; and, thirdly, the lodgement of grant claims on a half-yearly basis.

  The bill seeks to tighten up the net through which canny and cunning operators will seek to continue rorting the availability of taxpayer funded grants, and such a move is long overdue. Currently, under the act and under the scheme, those unscrupulous individuals with criminal convictions are able to obtain grants, and this is simply not acceptable.

  The bill seeks to ensure that claimants who make export development expenditure while under a scheme of arrangement are eligible for assistance only if the business is certified to be a going concern at the time of that expenditure. This means that the business operations of the claimants must be sound and intact before any further dipping into taxpayer funded grants is permitted, and this, of course, is how the scheme should operate.

  The bill also introduces a combination of technical and administrative amendments which seek to protect the scheme's principles and efficiency. It provides for half-yearly grant payments in respect of exporters' early stages of marketing. That will be of great assistance to newly developing exporters.

  With particular reference to the bill, sections 11UA and 11UB relate to insolvency. Section 11UA relates to the government's decision in respect of bodies corporate that expenditure incurred while a claimant was under insolvency administration is not claimable unless the claimant is certified to be solvent at the time the expenditure was incurred.

  Section 11UB seeks to make expenditure which could otherwise be reimbursed by Austrade incapable of being reimbursed where it is incurred by a person who is under insolvency administration or by a partnership or corporation when a member of the partnership or a director of the corporation is under insolvency administration. Additionally, expenditure by a partnership will not be reimbursed when one of the members of the partnership is a corporation and a director of the corporate partner is under insolvency administration. However, a new owner of a previously insolvent export business—that is, someone who takes over the ownership or management of a business earlier made insolvent—may still make a claim for reimbursement under section 19 of the act.

  With respect to criminal convictions, new section 11YA will exclude from eligibility, for up to five years from release of custody, claimants with criminal convictions for breaches of key corporate duties or offences which involve fraud or dishonesty and which carry two years imprisonment.

  A sound principle being proposed here in section 13 relates to the requirement for companies to demonstrate an appropriate level of performance before further claims are granted. This is also a timely amendment because it will ensure that companies are making real attempts to emerge as significant export concerns and not simply relying on government grant funding.

  These steps will certainly help those Australian exporters who are making ground in the fragile export arena. But it is an indictment on this government that the Prime Minister ignored opportunities to arrange a bilateral visit to one or two Middle Eastern countries to improve our trade and export relationship when he was already visiting a nearby country—that is, Cyprus—for the Commonwealth Heads of Government Meeting. It is alarming because the Arab countries of the Middle East and Israel are major customers for our rural products. Given the parlous state that our primary producers currently find themselves in, this is simply not good enough from the leader of this country. In particular, these countries are targets for United States export enhancement program subsidies and subsidised product from the European Community on the very products which we sell to them. So our markets there are under severe threat. The Prime Minister should have ensured that he visited at least one or two of these countries en route to or from Cyprus.

  Apart from our exports of grain to the region, the following figures indicate the importance of these markets for our products. The United Arab Emirates, Oman and Kuwait purchased $207.3 million worth of live animals in 1991-92. In the same year Saudi Arabia alone purchased a total of $206.7 million in major exports from Australia, including $80 million worth of sheep and goat meat and $91.9 million worth of cheese and curd. Yet the Prime Minister did not visit Saudi Arabia on his way to or from Cyprus.

  The Prime Minister is visiting Indonesia en route home. This is worth while because Indonesia is also a significant market for Australia of some $438 million worth of cotton, minerals and wheat. But that is no excuse for the Prime Minister's overt neglect of the middle-eastern countries and their potential to us as export markets.

  While the Prime Minister continues to push the value and importance of our Asian neighbours as export markets and seeks to persuade Australians that they are part of Asia, I remind him that more than 15 years ago, in an address-in-reply debate in the other place, I called for Australia to `turn our face to Asia' as a market for our goods. In the light of the Prime Minister's recent interest in Asia, I do not recall him demonstrating at that time such prescience or any particular interest in Asia as a source of trade for Australia.

  An examination of the facts shows a pathetic but dramatic contrast between the reality and the rhetoric as far as our trade with Asia under the present government is concerned. Under 10 years of Hawke and Keating Labor governments, although the global amount of trade in Asia has grown quite significantly, Australia's share of that trade has fallen quite dramatically. This really is a hopeless performance under this Labor government. Our poor performance must be sheeted home to this government's failure to maintain the pace of reform required to allow Australian producers of goods and services to be sufficiently competitive in that market against other countries.

  I conclude these remarks by reiterating the opposition's support for this legislation but saying to the government that it is absolutely critical that it quicken the pace of industrial relations reform and taxation reform—getting taxes, particularly input taxes, off the back of business—and continue to reform our waterfront, where the level and pace of reform is still inadequate, and all of those other areas which we on this side of the chamber have been advocating now for some years to ensure that producers of goods and services in Australia are competitive with those of other countries which are taking advantage of the dramatic growth in Asia. Otherwise we will continue to be left behind. While in absolute terms the dollar value of our exports to those Asian countries might increase, our share of that trade will continue to fall as it has under a decade of Labor.