Dynamic Export

Alternative finance
Another encouraging aspect of the report from an assistance viewpoint is contained in Appendix 1 of the full report under the heading ‘Alternative Finance Options’. Here Mortimer discusses three new program options to work in tandem with the EMDG scheme.

While all three have merit, the first one is of particular interest to the SME sector. Called the ‘New to Export Grant’ the text argues rightly that new, inexperienced exporters need forms of finance with inexpensive application processes and the shortest possible delays between incurring the expenditure and the grant allocation. It’s a dollar-for-dollar program and expenses incurred would be limited to typical first market entry expenses. It would also recognise ‘preparation to export’ costs such as market research, business planning and importantly, the development of export skills. This program would form a bridge between TradeStart and EMDG, undoubtedly allow better targeting of EMDG, and assist in addressing the high dropout rate of new small claimants under EMDG. I trust the Government will look closely at this initiative.

This brings me to TradeStart, Austrade’s very successful new exporter development program. In short, Mortimer supports the program and recommends it be extended. This is good for two reasons: first, it’s inexpensive and it works. Second, because of its delivery design, it encourages Commonwealth, state and private providers to work together for a mutually beneficial outcome. We see this second issue—cooperation between agencies and the outsourcing of functions to the private sector—as critical not only for TradeStart but for a range of activities, including export skills development and overseas representation. It’s encouraging to see the report address this very important issue, as duplication makes no sense at all.

The report, of course, goes further than this and accords a high priority to the Council of Australian Governments (COAG) to “construct a seamless national economy for goods and services that delivers a truly consistent regulatory environment”. Wonderful words, not only to the export community, but also to our colleagues in transport and logistics. Mortimer recommends that COAG accord a high priority to elevating the importance of international export and investment considerations in the deregulation agenda and, by example, highlights the need for greater streamlining in program and service delivery, and cutting the regulatory burdens faced by SMEs.

He goes further to give priority to implementing a paperless trading system in the area of customs documentation. As argued in previous papers, this latter issue is an enormous cost burden to Australia, to exporters and to the environment. From an SME exporter viewpoint, addressing these international competitiveness issues is critical.

In early discussion with the review team, I was concerned that financing offshore activity would get swept away, particularly for those in the SME sector. We are very pleased to see that the report provides a strong commentary on the issues and makes a range of recommendations in relationship to that, and participation in international supply chains. First, it supports the limited expansion of Export Finance and Insurance Corporation (EFIC) powers to support Australian companies seeking to invest offshore. Secondly, it equips Austrade to advise new exporters and offshore investors on appropriate sources of financial advice.

As investment in offshore production facilities and participation in international supply chains become increasingly important to trade and to our international competitiveness, it’s important that the financing of these activities is addressed.

We also endorse the need to ensure our overseas network of Austrade offices is well resourced, as the SME sector is highly reliant on these facilities, particularly the knowledge and skills of the local staff. We endorse too the establishment of a trade and investment council and an Austrade Board and stress the importance of sound representation from the SME sector whose needs differ from those managing large export operations.

The report is not radical befitting the current economic environment and there is no massive shift in what we are doing to drive export and investment. A number of the recommendations are based upon doing the good things better and investing in areas of greatest return.

Its strategic approach is on the four key pillars, namely international competitiveness, market access, market development and cohesion, and coordination. With a few exceptions on the mechanics of the EMDG scheme and more emphasis on skills development, the report from an SME sector perspective addresses the key issues and we trust the minister will endorse its implementation.

—Ian Murray is the executive director of the Australian Institute of Export

Download the full report at The Department of Foreign Affairs and Trade website: www.dfat.gov.au/publications/mortimer_report

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