Dr CHALMERS (Rankin) (11:19): I also rise to speak on the Export Finance and Insurance Corporation Amendment (Direct Lending and Other Measures) Bill 2014. I agree with what the member for Hindmarsh said about the importance of EFIC to our economy and to our businesses. I want to commend the member for Canberra for a characteristically interesting speech about her time working in small business and also working for the Department of Foreign Affairs and Trade.
The original EFIC bill was a proud legacy of the Hawke government in 1991. In that bill, they did build on the corporation which is an independent statutory corporation that is separate from Austrade, offering competitive export credit facilities for Australian exporters. Its purpose is to assist Australian companies, as the member for Hindmarsh said, and enable them to win business, to grow internationally and to achieve export success.
As our export credit agency, the corporation operates on a commercial basis and partners with banks to provide financial solutions for businesses that are exporters, Australian companies with export supply chain and Australian companies operating in emerging and frontier markets. They are all very important aspirations. In performing that role, as others have said when they spoke before me, it does give our companies the leg up that some need in the financial world in order to compete. That is particularly in our own region of Asia.
The reason that Labor is supporting the bill before the parliament today is because there are changes that can be made to make sure that EFIC keeps up with changes in the composition of our exports and other changes. The Australian Bureau of Statistics says that only five per cent of our exports right now are capital goods. Members would be aware that EFIC, as it stands, can only directly assist capital exporters. That does exclude 95 per cent of our exporters, who are people who want to do business in Asia and beyond and who want to export things like wine and products that are not necessarily the capital goods—so that 95 per cent of our export composition.
We do need to make sure that our trade arrangements—EFIC and also our broader trade arrangements—keep up with the changes in our economy and the changes in the global economy. This bill certainly does that. The other problem with EFIC as it stands that the bill seeks to rectify is that it does lock out from direct assistance a lot of the small and medium enterprises that we do want to be encouraging in our economy. It is important this bill fixes that problem up.
As the member for Canberra mentioned, on this side of the House we do have are proud record of supporting small business. We had in government things like a variety of tax concessions for the two million small businesses, who employ something like five million Australians; we had the tax-loss carry back; we had the instant asset write-off and we had the special depreciation rules for motor vehicles. Unfortunately, these have been scrapped by those opposite. That is an unfortunate development for small businesses in particular. We do want those small businesses and medium businesses to be able to access EFIC finance, which is what this bill is all about today.
In terms of the bill itself, it will create amendments to that original EFIC act from the Hawke government in 1991. It will give EFIC the ability to lend, as I said, in all goods export transactions, not just capital goods transactions. In that way, the most substantial change that the amendment to the act makes is to remove capital from capital goods and the definition of eligible export transactions and make all the consequential amendments that flow from that. It allows direct lending to those exporters of goods, not just capital goods.
Other speakers have mentioned that as it stands right now if you are excluded from direct EFIC assistance on the basis that you are a goods exporter and not a capital goods exporter, you previously or until now had to go through all sorts of rigmarole to tee up guarantees and all sorts of arrangements in order to access some assistance. That would be a burden for SMEs in our economy. It is important that they are now eligible for direct assistance after the passage of this bill. As I said before, that brings those other 95 per cent of exporters into the net of people who can be assisted by EFIC.
We support the changes. We did have some more ambitious changes on the table when the government changed. Those have now lapsed unfortunately. We did have slightly higher horizons for changes to EFIC but in the absence of those, which have lapsed, disappointingly, we do support the changes brought forward by the government for a lot of the reasons that the member for Hindmarsh and the member for Canberra mentioned earlier. In the absence of those three tax concession measures that were dumped by the current government but that existed under the previous government, we are looking for any way we can to help small- and medium-size businesses compete, particularly in our export markets.
So what we hope to see as a consequence of the passage of this bill is more businesses benefiting from the good work that EFIC does. We want to see more small- and medium-sized enterprises prosper from that good work and we want to make sure that Australian businesses, not just big businesses and not just exporters of capital goods but all of Australian businesses, can benefit from EFIC we want to see them eligible, we want to see them competing and we want to see them succeeding.