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An export wishlist

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An export wishlist article image

I have a wishlist for the export sector for 2010. The first is for rain; while not everybody got it - sadly WA experienced terrible fires - lots fell in Queensland and NSW, which will have a positive effect on our agriculture exports in the coming year. It would be nice to link this with having an Aussie dollar at about US70c, though chances are probably remote. Of course, if you bring in parts, are expanding facilities overseas, or buying out your competition, US90c plus looks pretty good. The coming year will be another interesting one: the global economic situation looks on the mend, it will be an election year in Australia and in the UK and, export-wise, forecasters predict sectors like mining, building and construction, and possibly agriculture should be strong. While there is always a flow on effect, these sectors are largely driven by ‘big end of town’ exporters, so what of SMEs? Here’s where the Government can assist. While nobody is after handouts, there are things that can be done to assist both the experienced and inexperienced exporter in the year ahead. The issue of research was most recently discussed at the Trade2020 forum on trade finance. There’s a lot we don’t understand about export dynamics, exporters’ business behaviour, and factors that make exporting successful or unsuccessful. There is lot, too, that could be done in understanding the markets better, including mapping markets to assess where investment is likely to present the greatest opportunity and return. It is encouraging to see EFIC continue their annual Global Readiness index (GRi). The study, undertaken in March, looks deeply at the current drivers, decision-making processes, risks and barriers that Australian exporters and offshore investors face regularly. I encourage exporters to participate, as the results help in the development of programs that assist SME exporters. It would be good to see the Government put more money into GRi, and into doing well thought-out research to be shared with various service providers to benefit the whole industry. My next wish won’t surprise anyone: having sufficient funds for the Export Market Development Grants scheme, one that will provide the Government with the best ‘bang for buck’. Most support the views expressed in David Mortimer’s report of Export Policies and Programs in relation to the cap and the need to instill confidence in those reliant on the scheme to build their export business. However, there’s no point using the scheme to fund one-off export ‘adventures’. While issues like reducing the threshold and length of time from eight to five years may be justifiable, it may be better to set the scheme at a maximum of $1 million per company and use other mechanisms to keep expenditure within the cap. TradeStart may well be a better vehicle for looking after the smaller guys. And so to TradeStart. My wish is to see it continue, backed by Government for another four years. Data in the Mortimer report showing an ROI up to 23:1, as well as recent Austrade research supports its financial viability, though there are some things that could be done in line with its evolution, the first relating to ‘hurt money’: anyone in a program has to demonstrate their commitment by spending some money. Beyond will, money, and product or service, a successful exporter undertakes the dynamics of the market by experiencing it. Stats show 75 percent of first export sales come from those that have been on a trade mission, or been into the market. This should be a condition of participation in the TradeStart program, along with undertaking export education, given export requires a special range of skills and knowledge beyond domestic business. Finally, also the Mortimer Review, Commonwealth and State Governments need to work together to provide dollar-for-dollar assistance programs for TradeStart participants for things like the completion of export education, participation in missions, and the preparation of an effective export business plan. Lastly, I wish for the broadening of the export skills of Australian business. Mortimer recommends: "Extend the tertiary focus of export education program to encourage a new generation of international business leaders." Evidence collected here and internationally supports the link between developing export skills and having a profitable, sustainable export business. The more invested in developing the skills base, the better the result. The programs are there; all that’s required is to engage more companies. Done well, the above will form a pathway to export with a focus on ‘backing winners’, giving Government the opportunity to maximise its return for every dollar invested. We encourage the Government to be courageous in addressing the needs of the export community, but only where there is fair investment at both ends. Nobody is looking for a free ride; if they are, they won’t make good exporters.

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