I am pleased to have the opportunity to speak on this export finance and insurance corporation bill, as I believe it will provide benefits to small and medium businesses right around Australia. Members will be aware of my passion for micro and small business. Before entering parliament I ran my own small business for 10 years, so I understand the challenges that small-business owners face. Since entering parliament I have spent a great deal of my time talking to the small-business operators in my electorate of Canberra and advocating for their needs and interests.
Small businesses are the engine room of our economy and we need to develop the policy environment for them to thrive. Small businesses employ more than five million Australians and contribute almost 50 per cent of private-sector employment. That is why I am particularly pleased with the number of amendments that are in this bill on that front. By broadening Efic's ability to lend in all-goods export transactions, not only capital-goods transactions, there is the potential to see this country's export potential grow significantly.
The Export Finance and Insurance Corporation is a statutory body that offers trade finance and insurance services to support Australian exporters. The export credit agency operates on a commercial basis and partners with businesses and banks to provide finances to SMEs that are exporters, companies in an export supply chain, companies looking to expand their business overseas and companies operating in emerging and frontier markets.
Efic provides financial services to companies that have been unable to secure adequate finance from the private sector. It fills a gap in the market. It provides SMEs with an opportunity, a chance that conservative Australian banks just cannot do. It will often take a risk on an SME where a bank would not. This kind of risk is crucial in getting SMEs off the ground and ultimately helps lead to innovation in this country.
Labor's record with the Export Finance Insurance Corporation goes back to its establishment. In 1991, the Hawke Labor government passed the original Export Finance and Insurance Corporation Bill to re-establish the EFIC known as the Export Finance and Insurance Corporation. This original bill established the EFIC as an independent statutory corporation separate from Austrade, offering competitive export credit facilities for Australian exporters. It is pleasing to see that the Export Finance and Insurance Corporation still operates today under the minister's statement of expectations issued by Labor's former minister for trade, Dr Craig Emerson.
There are a number of amendments in this act which will help Australian businesses flourish and I support them wholeheartedly. This bill gives EFIC the ability to lend in all goods export transactions not only capital goods transactions, as I said before. This will expand EFIC's capacity to support Australian businesses, particularly SMEs, as the vast majority of Australian exporters are not capital goods. To implement this measure, it requires deleting the word 'capital' from the definition of an eligible export transaction in the EFIC act. According to data from the Australian Bureau of Statistics, only five per cent of Australian exports are actually capital goods yet under the current EFIC act, EFIC can lend directly in support of capital goods but not all goods. This means EFIC cannot lend for exports for many of the products for which Australia is famous—that is, goods like food and wine. It can, however, support the export of cows but not milk. From a business point of view, this just does not make sense. As I mentioned earlier, allowing EFIC to lend for the other 95 per cent of exports significantly improves Australia's export potential. This is particularly good for small business, particularly good for jobs and particularly good for Australia.
The second substantial amendment effected by this bill is the widening of the competitive neutrality provisions as recommended by the Productivity Commission. Currently such provisions only apply to short-term insurance contracts. This is outdated as EFIC now lists only medium-sized insurance as a product. In its 2012 inquiry report, the Productivity Commission recommended that EFIC should pay a tax equivalent charge and a debt neutrality fee in order to ensure that the EFIC's activity on the commercial account complies with competitive neutrality arrangements. This bill implements this recommendation.
Labor welcomes measures that make it easier for Australian businesses to export their goods internationally and that is why we welcome this bill. Labor is committed to expanding Australia's international trade opportunities to generate jobs and growth for the future and this bill is consistent with that objective.
I want to touch briefly on my experience of EFIC. In my former life I worked with the Department of Foreign Affairs and Trade as a diplomat. I worked on the Middle East desk couple of years. During that time, I worked on Iran and was involved in the normalisation of the relationship with Iran. I commend Tim Fischer, who actually drove the change to that policy. It was a significant change to our policy. We had diplomatic relationships with Iran and had not severed those after 1980, but the relationship was not terribly strong. There had been no exchanges, no business trips, no ministerial visits.
Tim Fischer saw the opportunities that Iran offered, particularly for sugar exporters and for a range of other resources in addition to just services and products. I was involved first up in the normalisation of the relationship and, secondly, in the first ministerial visit to Iran in 10 years. Tim Fischer was the minister at the time and led a business delegation to Tehran. As I said, there was a broad range of people that were involved in that delegation. There were people from BHP, there were people from CSR Sugar. We had people who wanted to export tiles into Iran and people who were looking at exporting gems into Iran. A very broad range of potential exporters took part in that delegation. It was a historic delegation. It was a significant delegation and Efic was there alongside these potential exporters to identify potential opportunities for them to engage in trade with Iran.
The beauty about Efic, too, was the fact that because they understand government and work closely with them they were involved in the discussion that I was also involved in, which was led by BHP, where we engaged in a negotiation on a banking and finance agreement with Iran. They were involved in those discussions. They took about two days to get going and to finalise. Again, it was a major outcome of that visit—not just the symbolic gesture that was shown by actually having a minister there for the first time in 10 years but also the fact that we had this significant business delegation and produced a range of agreements, most importantly, this banking and finance agreement, which in a way provided the framework for exporters to engage in trade and export opportunities with Iran for the future.
In terms of the relationship with Iran, the environment was very different from what it is today. At that stage Khatami had just been elected and Iran was looking to engage in greater liberalisation and was also opening up to the world. There are gestures being shown at the moment that they are also keen to engage more openly with the rest of the world and, in a way, liberalise. But at that stage there was this real sense of energy and momentum for change and a real will for change in that country. It was completely appropriate for the then minister, Tim Fischer, to have a vision for what the relationship could be with Iran at that stage, to engage in that ministerial visit, to take that business delegation to Iran and to engage in negotiating those agreements. It was a very different environment to what we see at the moment, but I do once again applaud the former minister for actually having the vision for that relationship and realising it through that ministerial visit.
Labor especially welcomes measures that benefit small businesses and I personally welcome these measures. As I said to you before, prior to this life I was a diplomat and then after that I had my own small business for 10 years, which was a wonderful experience. I am always looking for mechanisms to improve opportunities for small business and particularly to provide the right policy settings for businesses, both micro and small and medium, to thrive.
I want to take this opportunity to sing the praises of a number of Canberra businesses which have achieved great things on the export front. In October the ACT Chief Minister held her export awards and a number of businesses won those awards. Some of them you know. Aspen Medical—we all know of Aspen Medical—have just won the Ebola contract. That business went from being a kitchen table business 10 to 12 years ago to being an absolute multinational, international civilian and military outfit that is winning awards all over Australia and contracts all over the world. They are a class outfit. Glenn Keys and his team do an extraordinary job. They are based in my electorate here in Canberra and, as I said, they are exporting to the world. Every time I see Glenn he has another clutch of awards under his arm that he has won. He is an extraordinary individual with a great vision and he is always a great contributor to the Canberra community. So it is not surprising that, once again, Aspen Medical won the health and biotechnology award.
I want to sing the praises of another company—that is, Canberra-based technology company Seeing Machines. They were crowned ACT Exporter of the Year. Again, this is an extraordinary company. In Canberra we have these very specialised businesses that usually provide services, but they have a real cutting edge and they really do us proud. Seeing Machines develops state-of-the-art fatigue and distraction monitoring technology. They developed the driver safety system, which is already being used by mining, commercial road transport and automotive industries worldwide. The company was founded in 1999. It now has 95 employees across Canberra, San Francisco, Arizona and Tuscany, with export sales accounting for 53 per cent of its revenue. It was recognised as Exporter of the Year just a month after the company announced a collaboration deal with Samsung that aims to bring face- and eye-tracking technology to the consumer electronics market.
I also want to make mention of another company, Intelledox, who have also done some great work in terms of linking up with South Asia and also exporting to Singapore. They are an outfit that recently made a significant donation to the ANU. They digitalise processes through mobile-ready smart web forms. They are involved in document automation, data transformation and business integration. They are essentially a data management outfit that have done some great work here in Canberra in the Public Service and right across Australia, and now they are exporting to Singapore. They were founded in 1992 and they are headquartered here and have offices in Singapore, New York, London and Toronto, as well as global partners throughout the world. They have been awarded Telstra ACT Business of the Year, they were listed on Anthill Magazine's 2013 Smart 100 list and they were named a BRW Fast 100 company in 2010 and 2011. Again, they are another class outfit from Canberra that is exporting to the world with particularly creative and innovative solutions.
In closing, I want to touch on Labor's record on small business, because it is a very good one and it is a very proud one. We supported and established a range of programs to assist small businesses to expand their trade and export opportunities. The Export Market Development Grants scheme is a terrific example of this. The scheme provides assistance to aspiring and current exporters, and the grants are a key measure in supporting Australia's small and medium-sized business who want to develop export markets. As I said, as a former small business owner myself, I know that deciding to export involves a great deal of risk—it is a real leap of faith. The research, promotion and travel required to identify the markets and build the relationships to begin exporting is incredibly costly. This scheme reimburses a significant amount of eligible export promotion expenses.
Labor, as we know, also increased the small business instant asset write-off threshold from $1,000 to $6,500. In our 2012 budget, we announced that we would provide tax relief for business by allowing them to carry back tax losses of up to $1 million so they could receive a refund against tax already paid. And it was Labor that commissioned the first Small Business Commissioner in this country. Labor is committed to expanding Australia's international trading opportunities to generate jobs and growth for the future, and this bill is consistent with that objective.