Parliament Updates

Zali Steggall MP speaks on Treasury Laws Amendment (2020 Measures No. 6) Bill 2020

8 December, 2020


I rise to speak on the Export Market Development Grants Legislation Amendment Bill 2020. The value of Australian goods and services exports reached a record $470 billion, up from $403 billion in 2018. With over 53,000 goods exporter, we are now the second-largest exporter of beef, the third-largest of lentils, the fourth-largest of sugar and wine and the largest global exporter of iron ore. We continue to punch above our weight on the world stage. The Export Market Development Grants scheme is a significant federal government financial assistance and incentive program for small to medium exporters and aspiring exporters. However, it's important to periodically revisit policy settings and parameters so as to ensure that they remain relevant and effective given changes in the trading context.

This bill will make important amendments to the Export Market Development Grants Act passed in 1997, which made changes to the Export Market Development Grants scheme administered by the Australian Trade and Investment Commission. The scheme provides a 50 per cent reimbursement to the costs of small and medium enterprises with turnovers less than $50 million for their export related marketing expenses above $5,000. Under the proposed changes there will be a retargeting of the threshold to export businesses with a turnover of less than $20 million a year, although the majority of SME exporters will still fall under this threshold.

The grant aims to encourage SMEs to create, develop and expand export markets for Australian goods, services and IP, and it's very much welcomed. SMEs are the lifeblood of our economy and it's important that we support them in their international endeavours and to become export-ready. I very much support this scheme.

According to the Australian Bureau of Statistics, only two per cent of businesses in Australia are good exporters. This is partly because many Australian SMEs face considerable challenges when they wish to export. The challenges include a lack of overseas contacts, high start-up costs in exporting and still higher costs of compliance with regulations. The scheme provides financial assistance to Australian SMEs to tackle some of those challenges. The scheme is also facilitating growth in our two-way trade driven by our SMEs. It has generated over $3.8 billion in export earnings, it's helped support the employment of over 69,000 people and it has facilitated exports to 138 countries. So this scheme is functioning well, but in 2020 the independent review of financial assistance to SME exporters found several ways the government could, in fact, improve it. We must improve the functioning of this scheme as we continue to open up to new markets and emerge from COVID-19 in post-trade restrictions.

The review found that it's time to simplify, streamline, give certainly and make more timely payments to recipients of the grants. This bill will enact several recommendations that do this, including making funding more certain and less varied by providing an up-front grant, which will be especially helpful given current global trading conditions and the difficult conditions coming out of COVID for many of our SMEs. Further, education and training will be included as an eligible expense for the grant. The bill will also create a new legislative structure that allows the government to respond quickly to changes in market conditions and business practices. Business groups, such as the Export Council of Australia, have expressed support for the bill. The bill will help more SME exporters access the scheme and get much needed funds sooner.

Warringah is an internationally-facing electorate. We have many global travellers and many businesses who embrace global opportunities. Businesses in my electorate are grasping the opportunities of those export markets. There are some of the perhaps cheeky businesses as well—maybe unusual ones for ironmen, swimmers and beachgoers, and probably the previous member for Warringah! Every Australian should know about the iconic Budgy Smuggler Swimwear. Budgy Smuggler began in Manly. It has a factory just up the road. It's 100 per cent Australian owned and manufactured. When presented with a pair of Budgy Smugglers, Prince Harry, at the Sydney Invictus Games, said:

It doesn’t get better than that ... Only in Australia would you ever find something like this. It’s so wrong, but it’s wonderful.

The UK is now their biggest export market, followed by a rapidly growing French market. It's only right that the rest of the world should experience that touch of magnificent Australian beachwear. They were a beneficiary of the scheme as they attempted to tap into the export markets, but, prior to these amendments, they had issues with how the scheme reimbursed the up-front costs. Assistance was only given after the marketing expenses had been incurred and paid. As a growing SME, that was a hit to their cashflow and at times it was difficult. When learning about the changes to the arrangements under the bill, they said it would be a massive help to a business like them to be awarded 50 per cent of the grant prior to expenses being incurred.

Other exporters in my electorate who will benefit from the scheme include manuka honey exporters who are focused on growing the global market to $1.27 billion by 2027. Microbreweries are popping up all over Brookvale and Manly and export development is high on their list of priorities. The new arrangements in the bill are prudent and appropriate. It's my hope that businesses in Warringah will continue to heed the call of international export opportunities and use the scheme to broaden their horizons. I commend the bill to the House.