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Cadbury and exporters funding may suffer cuts: Commission of Audit

The National Commission of Audit has recommended that Cadbury factory funding in Tasmania be abolished, along with 16 other industry assistance programs.

The report details 86 recommendations, aimed at making savings for the upcoming 13 May budget release.

The report cited the Cadbury program as having “no genuine market failure and where benefits accrue entirely or largely to the firm or industry supported.”

Also in the firing line are a number of bodies and programs intended to assist Australian exporters, including The Australian Trade Commission (Austrade), the Export Finance and Insurance Corporation (EFIC), The Export Market Development Grants Scheme, the Asian Business Engagement Plan Grants and support for the tourism sector.

The report backs up these export recommendations by referring to a number of changes since the program and organisations were founded, including “significant changes in the international environment, greater availability of information, an increased maturity of the financial services sector and a greater accessibility to professional services firms on a global basis.”

The suggested cuts to Austrade are due to a poor return on investment. The report states that in 2011-12, Austrade was provided with approximately $335 million in funding, which led to 205 export sales. The commission suggests that any remaining functions of Austrade, such as ongoing trade facilitation be incorporated into a commercial arm of the Department of Foreign Affairs and Trade, to reduce duplication of corporate services and other overheads.

Small businesses who export would feel the pinch of the recommended abolishment the Export Market Development Grants scheme. The scheme reimburses small businesses for up to half of their international marketing costs, the benefits of which the commission argues are captured by the business itself, without other benefits to the community. It also said that changes in the international environment mean that businesses now have more experience and opportunities for international marketing, and therefore there’s a lesser need for government assistance.

Tourism Australia, which is set to launch its ‘Restaurant Australia’ campaign next week (7 May) has also come under criticism. The commission proposed that funding for Tourism Australia be reduced by 50 percent, to focus on international marketing, and that grant funding for the tourism industry be ceased. "Most of the benefits of tourism accrue to the tourism operators," the report said, adding “there is no clear reason why significant funding should be provided to tourism above other Australian export industries.”

According to ABC News, Treasurer Joe Hockey is not saying which proposals he will accept or reject from the Commission of Audit, only that the federal government will respond on budget night.

“There are a number of recommendations that would be described as courageous” and "there are some recommendations that represent common sense,” he said.

 

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