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Export Finance and Insurance Corporation Amendment Bill 1997
Date Introduced: 26 February 1997
House: House of Representatives
Portfolio: Industry, Science and Tourism
Commencement: The Act commences on a day to be fixed by Proclamation.
If the Act does not commence within 6 months of the date of Royal Assent,
it commences on the first day after that 6 month period.
The purpose of the Bill is to amend the Export Finance and Insurance Corporation Act 1991 (Principal Act) to remove from the Export Finance and Insurance Corporation (EFIC) liabilities associated with Development Import Finance Facility loans.
The decision to introduce DIFF was taken in 1980, with the first project being approved in 1982, as a response to the mixed credit programs of other OECD donors.These programs had been initiated by many countries in the late 1960's, and by 1982 they account for about 6 per cent of total OECD bilateral Overseas Development Assistance.The main objective was to match concessional financing being provided by other countries and thus help Australian firms compete for aid projects.
A secondary objective was to help develop new markets for Australian exporters.While the original intention was not to subsidise manufacturers benefits to Australian industry being seen as ancillary to this objective, there was a concern that Australian aid would be good for Australia.For example, where Australian goods and services could be used in Australian aid projects, they should be used for this purpose as long as the result was not to reduce their quality as good aid.Some questions about this remaining the case, however, emerged with the changes in the administration of DIFF which could be seen to have resulted in the commercial aspects rivalling the development intent.
The DIFF scheme was cancelled following the change of government in March 1996.
A full analysis of the DIFF scheme is set out in a Current Issues Brief no. 20 of 1995–96 entitled A DIFFerence of opinion: cancellation of the Development Import Finance Facilityby Ravi Tomar (available on the ISR).
It is claimed that EFIC is overexposed to risk because of its significant lending to countries in Asia and this has potentially restricted EFIC's ability to provide non-aid medium term credit for Australian exports in these countries, particularly Indonesia.This Bill proposes to remove the DIFF loans from EFIC's account to the Government's account.
Item 4 of Schedule 1 inserts new section 66A into the Principal Act.That section:
Lee Jones
24 March 1997
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This Digest does not have any official legal status. Other sources should be consulted to determine whether the Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.
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ISSN 1323-9031
© Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library, 1997.
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Last updated: 9 April 1997