Opening doors offshore for our SMEs

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Statement by the Minister for Small Business The Hon. Bruce Billson MP.

Small to medium enterprises (SMEs) are the engine room of our country’s economy. The fortunes of millions of employees and their families across Australia – in our cities and the regions – are tied to their success.

The Abbott Government is committed to supporting small businesses and family enterprises, by creating an environment for them to prosper. Enterprising Australians know that for any business to prosper there is no substitute for customers. The Korea-Australia Free Trade Agreement (KAFTA) opens the door to millions of more prospective customers, which is why we are marking the significant milestone today of the Agreement coming into force.

The KAFTA is a major achievement by the Abbott Government to advance the prospects of Australia’s small businesses and family enterprises.

KAFTA eliminates almost all tariff barries into our third largest export market. From today, 84 per cent of our goods exports to Korea, by value, enter duty free. A range of products, from wheat to pharmaceuticals and wine to automotive parts, have today received a major competitive boost.

This figure will grow to nearly 100 per cent as Korea removes its tariffs on other Australian goods over time. The first tariff cut is today. Future cuts are scheduled to occur on 1 January in coming years – including New Year’s Day 2015, just three weeks from now.

KAFTA is not just about removing tariffs; Australian services providers will also get new access into Korea in legal, accounting and telecommunications services.

I urge all Australians involved in small business and family enterprise to not underestimate the value of this outcome for the SME sector and the opportunities it unlocks.

Let me explain why the KAFTA matters to Australian SMEs.

The reasons are threefold.

First, through KAFTA and other recent FTAs with Japan and China, the Abbott Government is creating opportunities for SMEs to achieve growth through export and economies of scale that cannot be achieved from the domestic market alone.

The Export Finance and Insurance Corporation’s September 2014 survey of SME exporters underscored that growth markets and ease of market entry are front of mind for SMEs when identifying priority markets. KAFTA delivers on both of these counts, lowering barriers to trade in a key market. This lifts competitiveness and external demand for Australian products and services.

Secondly, SMEs play a vital role in the goods and service supply chains of other exporters. Even if any given SME does not export, that same business may benefit from the growing input demands of other exporters.

Thirdly, while we relish more competitive exports, we must not forget the benefits of tariff elimination at the Australian border.

From today, Australian businesses gain access to cheaper inputs, making them more competitive and more profitable.

Australia’s other FTAs expand these opportunities. The Japan-Australia Economic Partnership Agreement will enter into force soon and the landmark Agreement with China, Australia’s largest trade partner and most important SME export market, will create unprecedented growth potential.

I encourage business owners to explore these opportunities. Austrade, the Government’s export promotion agency, provides valuable advice on opportunities overseas. DFAT’s website provides a range of practical resources, including a new step-by-step guide on accessing preferential arrangements into Korea.

We have better aligned support available via EFIC and the Export Market Development Grant programme to better meet the needs of SMEs seeking export opportunities. These opportunities can help enable SMEs to grow their business, and in turn our economy and jobs.

The Abbott Government’s achievements in concluding transformational FTAs with three major North Asian countries were motivated by a desire to create the right environment for business to prosper, which in turn creates jobs and generates growth.

I want to ensure Australia is the very best place to build and grow a small business and there has never been a better time for small business to grasp opportunity and help make this a reality.