Andrew Robb (Goldstein, Liberal Party, Minister for Trade and Investment) Share this | Link to this | Hansard source

I would like to thank the members on both sides who have contributed to the Export Market Development Grants Amendment Bill 2014, an important initiative promised by the government in the lead-up to the last election. We are very eager to see it put into place. The Export Market Development Grants Amendment Bill delivers on a pre-election commitment to progressively restore funding to the EMDG Scheme, starting with an initial $50 million boost over four years. It confirms the government's intention to increase funding to support Australia's small and medium enterprise exporters. This increase in funding enables the scheme to be expanded to provide support to an increased number of small and medium enterprise exporters and increased support to most existing EMDG recipients. The changes in this bill will help small and medium enterprise exporters to capitalise on existing export markets, re-enter export markets that are showing greater potential as the international economy improves, and enter new markets. The increased grants will be paid from 1 July this year. Therefore, it is important that this bill come into force at the earliest opportunity. That way, Australia's small and medium enterprise exporters will have the certainty they need to increase their marketing expenditure in pursuit of valuable export markets as quickly as possible. They will be able to qualify for the increased grants payable from 1 July.

In summary, the bill provides for the following changes to the Export Market Development Grants Act. First, it will apply an increase in the maximum number of grants per applicant from seven to eight, allowing many of the more experienced EMDG recipients to capitalise on their investment in international markets and pursue important diversification into new markets. Second, it will apply a reduction in the required expenditure threshold to qualify for a grant from $20,000 to $15,000. This will enable many small exporters, including those testing international markets for the first time, to qualify for a grant. Third, currently there is a $5,000 deduction from the provisional EMDG grant amount, and this will drop to $2,500, enabling most EMDG recipients to receive an extra $2,500 per grant. Fourthly, 'not fit and proper person' provisions will be applied to EMDG consultants to protect taxpayer dollars devoted to the scheme. Similar provisions have applied to EMDG applicants for many years, so this simply brings the provisions for EMDG consultants into line. Fifthly, the bill will enable a grant to be paid more quickly where the final amount of grant take-ups for a given year is known and where it is possible for grant amounts to be determined early. Finally, for the financial year 2013-14 only, additional administration costs can be met by Austrade from departmental appropriations.

I must say that the support the coalition is providing to small business, as exemplified in this bill, stands in stark contrast to the previous Labor administration's record over recent years. In the six years that those opposite were in government, 412,000 jobs were lost in small business, whereas in February we saw jobs growth in small business. Yesterday in this debate, the Deputy Leader of the Opposition lauded Labor's history of support for the EMDG program, yet they stripped $25 million per annum from the program at a time when hundreds of thousands of jobs were being lost from the small business sector and at a time when they were looking desperately for loose change to try to satisfy that imaginary surplus target, which we saw them pursue for two or three years. They cut the program by $25 million to just $125 million, the lowest level in over two decades. We are repairing some of that damage to our exporters, by putting $50 million back over four years.

If we are to get productivity and innovation back to where it should be, we must remember that our innovation centre in Australia always has been, and always will be, our small business sector. The small business sector is the heart of innovation. When those innovations take hold and start to succeed, the bigger companies come in and develop them. Really, the bigger companies in Australia have, in large part, outsourced innovation to the small business sector. It is critical that we create opportunities for small and medium businesses in Australia to get a toehold and to build relationships early so that in the years ahead we can take full advantage of the opportunities that are emerging in the region around us, especially from the exploding middle class.

We saw Labor add over 21,000 new rules and regulations, heaping an additional burden on small exporters. With this week's repeal day, we will be scrapping over 9,000 rules and regulations. Bear in mind, this is the just the first repeal day. We will have a succession of these in the months and years ahead. We are determined, as a government, to create the best possible environment, and the least cost environment, that we can for the over two million small businesses in our country. Labor's legacy is 412,000 jobs lost; major programs, such as the EMDG, being stripped of money; and a firestorm of regulations that have been imposed over the last six years. That is the miserable legacy of those opposite.

As I said, we do see small and medium businesses, and the exporters among them, as the engine for sustainable growth, led by the private sector. We understand how our exporters nowadays have to fit into global supply chains. Last night we heard the member for Sydney speak on this bill. She decried the fact that we have not proceeded with Labor's plans to cut EMDG funding for exporters to the United States, Canada and the EU. In fact, Labor tried to make those cuts last year. They have the mistaken belief that somehow this would contribute to Australia's engagement with Asia. They simply do not understand business. They have not got the experience on their front bench, or on their back bench for that matter, to inform their caucus and their shadow cabinet about the nature of business in the 21st century. Global supply chains are the overwhelmingly significant feature of modern-day business for both large and small businesses. Labor simply does not understand that the future for our sophisticated exporters is fitting into these global supply chains. In global supply chains, our exporters are often dealing with major multinationals, at the apex, based out of the EU or USA. Our exports might be one input into a multistage manufacturing chain—a chain stretching across several countries—with a product that ends up being sold to a consumer in China. We see this with the example of carbon fibre wheels produced by Carbon Revolution, an EMDG grant recipient out of Waurn Ponds in the seat of the member for Corangamite. This is new-age technology. This is leading-edge technology. This is technology that has been developed, and is now being produced, in a city which has been bedevilled by the loss of 20th century industries, with the movement of Ford, with the disappearance of Alcoa and with the pressure on cement manufacturing. All of these 20th century industries have created employment issues in Geelong—a major regional city in Victoria.

This technology is the way of the future. We are a knowledge-based economy, but these carbon fibre wheels are sent to the EU—they actually go to the EU—and Italy. Under Labor's proposed changes and the changes they sought to make last year, they would not have had the opportunity to engage or the assistance to develop an important market which is starting in the EU. That carbon fibre wheel will end up propelling a brand spanking new Lamborghini that will end up, in large part, being sold out of a showroom in Shanghai, Beijing or Guangzhou—all over China.

This is called global supply chains and why there needs to be a grant scheme that is available for small and medium business to sell into any area of the world, because we in this House have no ability to determine what global supply chain is in play with any particular product or service or where these products or services will end up. We just have to create the environment, the opportunity and the assistance to get our small and medium exporters into these markets in a way which allows them to start to develop 21st century products which will sustain economic growth and give us sustainable job growth in the decades ahead.

We do understand small and medium business, and that is why the government is seeking to pass this bill now. We want to deliver on our election promise to increase the funding, provide certainty for small business and encourage them to increase their export marketing expenditure this year and in the future. Again, I thank all members who have contributed to this debate and I commend the bill to the House.

Question agreed to.

Bill read a second time.