If the Government is really serious about trade and the opportunities Asia presents, let’s see them walk the talk

It seems ironic that in the week of launching “Australia in the Asian Century White Paper” the Government cuts the Export Market Development Grant Scheme by $25milion a year for four years. Professing that Australia needs to take heed of the massive growth in the middle class in Asia, invest in business opportunities, language proficiency and cultural understanding and in the next breath cut the only significant incentive left to exporters seems absurd. That cut of course follows earlier cuts to the scheme, the cap having dropped from $200million in 2010/11 to just $125million a year. This is a fall of almost 40%, at a time when Australia’s exporters are struggling to hold market share and achieve a decent margin.

The launch of the White Paper prompted a significant level of media coverage as one would expect. Few exporters though seemed to be engaged in the chatter. The fact is Australia has engaged with Asia in business since the 1950’s when John McEwen took off on his controversial mission to start a trade relationship with Japan. Ever since that visit and after being shut out of Europe when the Brits abandoned us, Australian business has traded with Asia in many a field of endeavour. Led by the food sector, including grain and beef, the education sector and more recently the resources boom, Australia’s engagement with Asia at a business level has, for our population base, been quite remarkable. The paper quite rightly points out that the middle class in Asia is expanding at an expediential rate of growth and that now is the time for us to focus on the youth generation and  have our kids learning an Asian language. Nobody can argue against kids learning Mandarin or Bashasa Indonesia, that has to be good for any student but let’s get serious about what is really needed.

First, and our research supports this, Australians trading with Asia need to know, and more importantly understand, the business culture not of Asia but of the individual countries they are dealing with. They are all different and in some cases even regions within countries are different. If the Government is realistic about encouraging a closer business interface, yes, invest in languages for schools as this is a good long term strategy but put some real money right now behind demystifying the business culture so that Australian’s are better equipped to negotiate a sound business outcome.

Second, if the Government is really serious about trade and the opportunities Asia presents, let’s see them walk the talk. Export is 22% of GDP; why not set a target for exports of 25% of GDP by 2020. Put money into the DFAT Trade division to be better equipped to negotiate trade agreements, put money into Austrade for greater overseas representation, for working with business and commerce to maximise the opportunity to win major projects in Asian countries as well and into the EMDG scheme which has historically proven successful.  Further support is also required for educating Australian business in Asian country business culture.

And finally the Government should focus on getting rid of unnecessary red and green tape which is slowly crippling our competitiveness. If one job in five is export dependent and the Asian White Paper is true, one could not in any way shape or form question this investment into our future.   
                            
In response to this and the need for change the ECA is currently undertaking a study to examine the trade programs available to exporters by a number of our major competitors for international trade. This data will form part of a submission and discussion paper on trade facilitation and promotion reform the ECA plans to submit to the Government and Coalition prior to the election. Should any members be interested in participating in the development of this submission please contact Lisa McAuley at lisamcauley@export.org.au.

 

Ian Murray is Executive Director of the Export Council of Australia. Ian has held senior general management positions with private sector companies including Johnson & Johnson, and has lived and worked in Indonesia, Malaysia, Singapore and Pakistan. During 25 years of service with Johnson & Johnson, Ian was Marketing Director of J & J Indonesia and Group Marketing Manager of the Australian company. Ian’s major focus at J & J was new product development, market research and marketing strategy.