Dynamic Export

He conducted a review of business programs in 1996 and was appointed an Officer of the Order of Australia in 2005, but what does David Mortimer have to do with export policy today?

The submissions we put into the Federal Government’s Review of Export Policy and Programs commenced with the words: “Never has broadening and deepening Australia’s export base been more necessary and rarely, with the rising value of the Australian dollar, has the challenge faced by the exporter, prospective and existing, been greater.” We can add to that the even greater challenge faced by exporters brought on by the international credit crunch which, apart from minerals, has well and truly dampened demand.

With this as a backdrop, David Mortimer AO, Dr John Edwards and a team from the Department of Foreign Affairs and Trade, including Austrade, set out to examine the best way forward for maximising our international trade and investment performance.

After discussions with hundreds of exporters, export service providers, government agencies and the digestion of over 160 written submissions, the ‘Mortimer Review’ was presented to Minister for Trade Simon Crean on September 21 in Canberra. The two-part, 260-plus-page document covers everything from market access to the programs that drive exports and investment, and presents the minister with some 80 recommendations.

While exporters have an obvious interest in the ramifications of trade policy, it’s no surprise that exporters, particularly in the SME sector, have a greater interest in the nuts and bolts of trade promotion, including Austrade representation offshore, assistance programs like the Export Market Development Grants (EMDG) scheme and financing their export growth. In this respect, it’s encouraging to see Mortimer has addressed these and similar issues and strongly recommends that government give priority to the funding of these programs.

The biggest one is the EMDG which, due to changes introduced a year ago, has experienced some really troubled waters. This has resulted in a quite severe lack of confidence from exporters and a subsequent drop in export marketing expenditure. It’s pleasing to see that the review team has recognised the importance of the EMDG program to Australia’s export performance and highlighted the need to restore confidence by saying: “A well-designed program should not create uncertainty about the level of benefit.”

Lifting the program cap to $200 million is close to what we expected and indexing it annually to preserve the real value is good to see. To avoid what occurred in 2006-07, Mortimer has provided some recommendations such as reducing the number of grants from eight to five and increasing the minimum threshold to $30,000, or reducing the reimbursement rate. These recommendations need debate, particularly the suggested move to reduce grants, as I see no point in returning to the time when marketing slowed and available funds were underspent.

For me, the most important issue is making sure the program is fully funded and that exporters are confident in going out there and spending at levels that will build a sound and profitable export business. The really good news in the report was the recommendation that the EMDG shortfall in 2007-08 be addressed. If the Government is serious about wrestling back confidence, this is where it must start.