Export has become a “sacrificial lamb” for the Federal Government’s plan to push the public coffers back into surplus, according to Ian Murray, executive director of the Australian Institute of Export. While he applauded the Federal Government’s forecast to be in the black earlier than expected, but making exporters pay was a highly risky way to go.
At the top end, Murray said the miners will be hit by the super tax, while at the bottom end, the popular Export Marketing Development Grants (EMDG) scheme has been cut by $50 million, with funding for Tradestart halved.
The successful EMDG scheme will fall short this year by an estimated $30 million and the budget cut will mean that it could be $80 million short next year. “This will destroy the confidence of SME exporters who will simply stop spending on developing their overseas markets,” he said.
“While Australia may have escaped the impact of the GFC, that’s not the case for exporters,” he said adding that the Australian dollar’s rise has already affected our competitiveness.
“What the industry wants is a scheme that is fully funded. Lift the funding to $200 million where it was last year, instill certainty and build confidence back into a program that every piece of research supports,” he urged, warning that otherwise, Australian exports will suffer “well into the future”.
Particularly painful was the 50 percent cut to Tradestart, he said. “It beggars belief that a program that costs so little and delivers so much can be slashed with the stroke of a pen. With one in five jobs being export related, the budget should be going up not down.”
Compared with the Rudd government’s first Budget in 2008, this was a disappointment, remarked Murray. “In 2008 the Rudd government spent a considerable amount of money on a review of Export Policy and Programs. Both the Export Market Development Grants scheme and TradeStart received the tick of approval for their continuation. In the budget this week they were slaughtered.”
He added: “At a time when countries like the USA are putting serious money behind an ‘export driven recovery’ the Rudd government is abandoning the countries lifeblood. One should never forget that export delivers 22 percent to GDP. Investment in export would be a far better way towards a black bottom line than slapping on taxes and chopping programs that assist our SMEs.”
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