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I rise to speak on the Export Market Development Grants Amendment Bill 2014. The bill delivers
on the coalition's election commitment to progressively restore funding to the export
market development grants program, which was cut by the previous Labor government. The
2013-14 Mid-Year Economic and Fiscal Outlook allocated an additional $50 million over four
years to the scheme from which Labor had cut $25 million per year.
The bill also broadens the eligibility requirements to ensure a greater number of small and medium-sized
enterprises receive a greater level of assistance to enter new markets. The bill increases the
maximum number of grants per applicant from seven to eight, and reduces the required expenditure
threshold to qualify for a grant from $20,000 to $15,000. It reduces the current $5,000
deduction from the applicant's provisional grant amount to $2,500, and about 85 per cent
of recipients will receive an extra $2,500 per grant as a result.
What this means is that a new business which has a unique product that only has a market
overseas and which is looking for its first sale and is spending just $15,000 on export
promotion will now get a $5,000 grant. Previously, they would have received nothing. An experienced
exporter who has received seven grants but whose business is suffering due to the high
exchange rate will get an extra grant to help try and recover these markets now that the
exchange rate is improving. They can receive a grant of up $150,000. Previously, they would
have received nothing. This bill will facilitate quicker payment of EMDG in years of low scheme
demand or where additional funding is provided. Enhancing the scheme will benefit many small
businesses in regional areas like Hinkler. In the last financial year, two businesses
in Hervey Bay, which is at the southern end of my electorate, one involving tourism and
the other in the fishing industry, received assistance under this program totalling $17,616.
I would encourage more of my local businesses to apply. Expanding into new markets is good
not only for the business concerned but for the local economy, and it creates jobs. They
only need to look at some of their fellow Hinkler businesses to see the opportunities
that exports can create. Hinkler has a proud history of exporting. Last year, Bundaberg
Brewed Drinks, the makers of the famous ginger beer, was named Queensland exporter of the
year. Regarded as one of Australia's most diverse food bowls, we export fruit and vegetables,
seafood and sugar. As household incomes increase in India and Asia, so too will the demand
for reliable, safe and fresh Australian produce. They are all things that we do well in Hinkler—safe,
reliable and fresh.
Named after the great aviator Bert Hinkler, the Hinkler electorate is also known for its
innovation. From the mechanical cane harvester, to the recreational aircraft built by Jabiru,
to beverages like Bundaberg Rum, manufacturing, processing and value-adding is alive and well
in Hinkler with the likes of Jakes Candy, Mammino Gourmet Ice Cream and Urangan Fisheries.
We also have some large exporters that started out as small local businesses. Bundaberg Walkers
Engineering Ltd was established in 1888. Back then it was known as the Bundaberg Foundry.Today,
the business is a dynamic organisation servicing the needs of sugar, power generation, mining,
marine and general engineering industries in both the domestic and the international
market. They export their engineering, technical and design services, and have manufactured
equipment to more than 20 countries, including Thailand, Indonesia, Argentina, the US and
Sudan.
With recent International Women's Day celebrations in mind, I note that Bundaberg Walkers Engineering
Ltd now has a female general ma nager. Leone Aslett is leading the team of 130 workers
in a field that is typically dominated by men. With two daughters of my own, it gives
me great comfort to see more women forging careers in the major exporting business. I
congratulate Leone. She is a local girl that married a local boy, attended university,
raised a family and now has a highly successful career. Hinkler, with its access to quality
produce and its proximity to Brisbane, has a manufacturing sector that is facing a period
of enormous potential. This bill will ensure that local businesses looking to enter new
markets get the marketing support that they need.
We on this side of the House recognise that small businesses are the backbone of regional
Australia. They employ about 50 per cent of all Australians working in the private sector.
In Queensland, small businesses account for 96 per cent of all businesses in the state.
Yet under Labor they were subjected to an ever-growing list of costly and time-consuming
red tape, endless rule changes and 43 new or increased taxes. In a period of just three
years, the Rudd-Gillard-Rudd government gave us two Prime Ministers, two Treasurers, five
Assistant Treasurers and six small-business ministers.
This bill seeks to give businesses certainty so they can begin planning their expansion
into new markets. Exporting is a very tough business, and I can give you one example.
In my electorate of Hinkler, AustChilli and AvoFresh, which are owned by the local De
Paoli family, employ between 80 and 100 people and they inject more than $10 million per
annum into the local community through employment, products and services. They supply food ingredients,
fresh produce and value added products to supermarkets in Australia and multinational
food companies. They are innovative, they are forward thinking and they are continually
looking for new markets and product opportunities. At present, exports make up just a small portion
of their revenue.
Director Trent De Paoli recently outlined for me some of the challenges they face in
exporting from Australia and why their success to date has largely been in domestic growth.
The cost of developing and servicing export markets is high. The expense of travelling
to your target country is often in excess of $50,000, and that is before you have even
started receiving an income from that market. Often with new markets the up-take is slow;
it takes years to build viable and financially sustainable returns that reflect the investment
made. To be successful in today's fast-paced world you need to have your own people on
the ground to ensure the business trade is accurately supported—again, a high expense
that is critical. Import duties can often significantly affect potential success.
Australian goods are very expensive due to the high costs of production, including labour,
electricity and water. This impacts our ability to compete globally. However, Mr De Paoli
still views the glass as being half full. He says the exchange rate is helping exports.
The demand is there. As I stated previously, emerging middle classes globally want high-value
products, and Australia is regarded globally as a stable country that produces quality.
The export market development grants will help businesses get a foot in the door. They
are just one of the things that this government is doing to help small- to medium-sized businesses.
Of particular benefit to my electorate, and as promised, we have also suspended Labor's
flawed marine management plans. We will create a new plan in consultation with stakeholders,
one that is based on science. We are providing $6.5 million for 25 research projects to ensure
the continued sustainability of Australian fisheries, including expanding the Status
of key Australian fish stocks report to include more species. We are producing an agriculture
competitiveness white paper to identify ways to grow farm profits and enhance agriculture's
contribution to economic growth, trade, innovation and productivity.
Repealing the carbon tax will begin the process of restoring Australia's global competitiveness.
Even *** Australia head John Borghetti has indicated the best assistance the parliament
can provide to business is the removal of Labor's carbon tax, which has cost the aviation
industry hundreds of millions of dollars. The carbon tax cost Qantas $106 million in
2012-13. That money would have paid the wages of at least a thousand staff. For my local
businesses, the costs of electricity and refrigerant gases, for example, skyrocketed with the introduction
of the tax.
We are cutting red and green tape to save businesses time and money. We are dedicating
days in parliament to slashing unnecessary red and green tape to lift productivity and
boost economic growth. And we recently released full details of the free trade agreement we
negotiated with South Korea. The removal of tariffs will benefit a range of Hinkler exporters,
including those in the sugar, horticulture and seafood industries. When the agreement
is fully implemented, 99.8 per cent of Australian exports will enter Korea duty free, resulting
in agricultural exports increasing by 73 per cent by 2030. Korea is Australia's third largest
export market, our fourth largest trading partner and an economy with an above average
growth outlook. It is Australia's largest market for raw sugar. Importantly, this agreement
protects our competitive position in the Korean market. With one in five Australian jobs linked
to trade, this agreement will provide an important boost to Australia's economy.
Economic modelling estimates that that agreement will boost our economy by about $653 million
after 15 years. And we are working to conclude agreements with other trading partners to
boost Australia's competitiveness in the global economy. This includes the Trans-Pacific Partnership,
which involves 12 countries including Australia and represents a staggering 39 per cent of
global gross domestic product. Our exports to member countries are worth almost $100
billion a year, accounting for about 34 per cent of our trade overall.
I also welcome the Prime Minister's announcement that he will visit Japan, Korea and China
next month with premiers and chief ministers to strengthen diplomatic and trade ties. He
hopes to sign the free trade agreement with Korea while he is there and progress negotiations
with China and Japan. The three countries together represent 40 per cent of Australia's
total two-way trade in goods and services, valued at a total of $250 billion. While China
is Australia's largest two-way trading partner, 123 countries around the world are in the
same boat. Competition is fierce. A free trade agreement will protect our relationship with
China. With that in mind, I note comments made recently by China's Premier Li that they
will seek to accelerate negotiations with Australia. Unfortunately, the negotiations
had stalled badly under the previous Labor government. While Labor dithered for eight
years, New Zealand beat us to it, reaching an agreement with China four years ago. Since
then, New Zealand's dairy sales to China have increased by $2.2 billion. We have every reason
to believe an agreement will be reached with China this year.
This bill ensures the export market development grants program complements the trade agreements
and partnerships that we are putting in place, making it easier, not harder, to do business
in Australia. This will grow the economy and create jobs for current and future generations—further
proof that the coalition is focused on trade, not trade unions.