Government response to the Industry-Led Services Export Action Plan
Thank you Frances [Adamson, Secretary DFAT] for helping to set the scene and that kind introduction.
Can I also recognise my parliamentary colleagues Senator Andrew Bragg and Senator David Van, both passionate supporters of services exports … indeed Andrew even wrote a book on it!
It’s a pleasure to be with you to respond to this first iteration of Industry’s Action Plan to Boost Australia’s Services Exports — almost one year to the day from when we met here to launch this unique collaboration between the services sector and government.
Today is all about taking the next step — transforming our partnership into tangible actions that can help our services exporters unlock their full potential.
Australia is renowned as an exporter of exceptional goods, from our minerals and resources to our agricultural products.
But we’re also a world-class producer of services.
And we need to together build a narrative that tells our story more strongly.
Under this Government, we have seen services exports reach record levels, valued at $97 billion in 2018-19 and growing at 10 per cent.
The bulk of these exports are currently coming from our education and tourism sectors.
But given the strength of our services sectors domestically, we know there is considerable untapped potential to grow services exports — in a number of sectors represented here today.
Turning to your Services Export Action Plan, I want to thank those of you who have been involved in shaping its recommendations.
Those recommendations fall under three pillars, and today I want to address some of the action this Government is taking under each of these pillars to increase our competitiveness.
To the first pillar — addressing regulatory complexity — rest assured this is a priority for the Coalition Government.
We have heard you and recognise that competitiveness begins at home.
Our domestic policies need to be pragmatic, responsive and flexible to ensure Australian companies can maximise emerging export opportunities.
We agree with your recommendations to strengthen the analysis and sectoral input available to domestic policymakers.
Our Government is already driving improvements in the design, administration and effectiveness of regulations.
Since 2013, our regulatory reform agenda has cut compliance costs for individuals, businesses and community groups by almost $6 billion through the introduction of initiatives such as MyTax and the National Business Simplification Initiative.
That’s $6 billion put back into our economy to make us more productive.
It’s played a big part in Coalition Governments creating over one million new jobs since 2013.
But the Prime Minister has been very clear: we still have plenty of work to do.
This was the underlying driver when the Government announced the establishment of a new Deregulation Taskforce in June this year.
You will have the opportunity to hear more from the person driving this taskforce, Assistant Minister Morton, later today in your program on this Taskforce.
But to highlight, the Taskforce will improve the design, administration and effectiveness of government regulation, to ensure it is fit for purpose.
It will focus on the degree of regulatory complexity, the length of time for approvals and duplication across levels of government.
New ways of using technology to make it easier for business to cost-effectively navigate regulation — so called “regtech” — will be on the table.
Specifically, technology can help us achieve a trade ‘single window’ which remains a government priority.
But, if we’re going to make this ambitious regulatory reform agenda work, we also need the Commonwealth and the States and Territories to be joined at the hip.
You too have clearly identified this need of consistency across levels of government and constituencies, so we are aligned in our thoughts.
Through the Council of Australia Governments (COAG), the Government has agreed to work across the federation to reduce regulatory barriers, so that business can grow and create more jobs.
To your recommendations around national regulation of professions, I acknowledge there is more we can do to promote greater coherence here.
While we’ve done well in facilitating free movement of professionals as individuals, this hasn’t always extended to a freer business environment for professional services firms operating in Australia.
Government is eager to work with the professional services peak bodies in exploring how we can achieve a more seamless environment for our services firms.
Another excellent point all of you hit upon in your Action Plan is the importance of quality data to inform good policy-making.
This is a major challenge when it comes to services exports, where traditional statistics tend to significantly underestimate the contribution of services exports to the Australian economy.
For example, while services exports account for around one-fifth of our overall exports, that figure doubles when we include embedded services.
The Morrison Government has funded the ABS to collect new data on exporting services firms. The outcomes of that survey, due in May 2020, will provide granular insights into the overseas investment activity of our services firms.
This will allow us to accurately assess our existing services footprint and importantly focus more succinctly on areas of untapped potential.
The Government also supports your recommendations under the Action Plan’s second pillar: overcoming barriers in overseas markets.
Over the past six years, the Coalition Government has been relentless in the energy and intensity of its efforts to break down barriers for Australian businesses in overseas markets.
I am proud to say that through free trade agreements, our Government has had more success removing tariff barriers on Australian exports than any other having since 2013 taken the share of Australian exports covered by FTAs from just 26 per cent to around 70 per cent and are moving to a target of 90 per cent
This isn’t just about goods: every tariff win for Australian goods overseas is also a win for our embedded services that make those goods possible.
To give a perhaps slightly biased example, every bottle of marvellous South Australian wine we get into the hands of a foreign customer is also a win for the accountants, lawyers, designers, marketers, and freight and logistics suppliers who make that end product possible.
Of course, the agreements we’ve struck are also targeting standalone services sectors.
Once the recently concluded RCEP comes into force, for example, it will set high-quality rules that provide a strong platform to expand services trade throughout the region.
Critically, this gives our services exporters the certainty they need to make longer-term plans for exporting into the region.
Australia will benefit from cooperation on professional services, disciplines on licensing and regulation, WTO-plus commitments on financial services and telecommunications and future liberalisation commitments.
However, the rise of non-tariff barriers (NTBs) is evidence we cannot declare mission accomplished.
Your Action Plan rightly draws attention to this — by some estimates, NTBs cost industry as much as three times more than tariffs.
In December last year, the Government launched an NTB Action Plan to help our goods and services exporters get in more markets faster, with greater ease and at lower cost.
It creates a more coordinated approach to addressing NTBs that brings together the capabilities of our trade officials, technical experts and diplomats.
The Government is currently working to address over 300 potential NTBs applied to Australian goods and services across some 77 markets.
A related priority for the Government is to work with industry to eliminate regulatory barriers faced by professionals and professional services firms overseas.
These ‘behind-the-border' barriers are often things like professional accreditation, registration and licensing.
That is why I was pleased to see your recommendations on mutual recognition and services qualifications.
We have been working closely with peak professional bodies to reduce behind-the-border barriers through mutual recognition agreements (MRAs).
When we started this initiative three years ago, there were 37 MRAs; now there are 54 MRAs across six professions.
As you have suggested, we will continue to facilitate this work to broaden the number of professions and increase the spread of international markets for MRAs.
FTAs also open an ongoing dialogue and momentum in the relationship that enables professional bodies to raise and address behind-the-border barriers.
For example, before the Japan-Australia Economic Partnership Agreement, it took up to 12 months for an Australian lawyer to register as a foreign lawyer in Japan.
That is now down to around three months thanks to greater industry-to-industry engagement and advocacy facilitated by the FTA.
Similarly, our FTA with Korea has reduced that period from six months or more to now only two months.
Of course, as the global economy transforms, we intend to lead in defining the rules for new and evolving forms of commerce.
By 2030, Australia’s digital exports are expected to grow by 210 per cent—and total digital trade could enable up to $192 billion in value to our economy.
We are actively advocating for cross-border data mobility and security to help Australian businesses make the most of the digital economy.
In the WTO, we chair E-Commerce negotiations which aim to develop the first global digital trade rules.
We’re also pushing to extend the WTO moratorium on customs duties for electronic transmission.
And we pursue similar outcomes in our FTAs.
We will shortly launch negotiations with Singapore for a digital economy agreement that will harness digital transformation and technology to expand trade and economic ties in our region.
We want to develop new rules that set ambitious benchmarks for the region, including for cross-border data flows.
Of course, signing onto new rules is only half the story: as your Action Plan makes clear, we need to continue to be proactive in ensuring our businesses know how to capitalise on them.
That’s where the third pillar is essential: supporting service firms as they internationalise.
The journey to exporting varies greatly – there is no one-sized model.
Broadly speaking, we see three types of exporters, as will be drawn out in this afternoon’s presentation by the Kantar Group:
- The reactive — those responding to a specific demand in a certain market;
- The proactive and deliberate — those who look internationally as part of a broader growth strategy; and
- Those ‘born global’ — to which exporting is a foundational aspect of the business’s mission and strategic plan from the outset.
Our export policy settings must be adaptive enough to cater for this breadth of ambition and business models.
We are working to provide exporters with more clarity on the range of government services available to support their efforts to grow and compete, both here and overseas.
And sometimes, it is the simple things that make the biggest difference. Take the Free Trade Agreement Portal as a great example. A testament to its value, this online tool has been accessed over 300,000 times since its launch in 2016.
This Portal helps businesses sort through the minutiae of trade agreements to find the information that really matters —including services firms—to make export decisions.
We will continue to improve the FTA Portal by working with relevant agencies to promote better information about FTA market access outcomes, including for financial services firms.
The Government’s online NTB Gateway also gives businesses an additional avenue to report issues and have them managed by the appropriate part of government.
This is especially useful for small and medium sized businesses.
We’ve also engaged over 5,600 businesses in the last four years through 129 FTA information seminars across Australia.
Two-thirds of these sessions have been held in regional areas.
We plan to deliver a further 100 seminars over the next three years, part of our commitment to add another 10,000 businesses to Australia’s export profile.
We will continue to make improvements to Austrade’s Global Business Support Finder, driven by your feedback while also making sure it complements rather than duplicates the service provided by business.gov.au.
Finally, we are committed to developing a nation brand for Australia—a recommendation I know has come up in almost every sectoral working group and which is close to being revealed.
A nation brand is the sum of people’s perceptions of a country.
In our fiercely competitive world, our brand ensures our services exports are trusted, respected and desired.
I assure you that the nation brand we are developing will be easily understood, consistently recognisable, quintessentially Australian and adaptable for different industries.
Ladies and gentlemen — this is a Government committed to taking every opportunity to grow our trade.
We want to walk in the shoes of business and tackle those barriers that stop you from realising your full potential. We want to be your enablers, not your inhibitors.
And I want to say thanks again all those who have contributed their valuable time in creating this Action Plan.
Of course, no single document can comprehensively identify every action being taken or being considered by Government.
Nor will the Government be able to accept all of industry’s recommendations — that is, of course, the nature of contested policy-making, something that we should be proud of in the policy environment we have created Australia.
But what I can promise you is that Government has heard you and is considering your recommendations in good faith and has provided a substantive response to all.
This is not the end of our conversation with industry — DFAT and Austrade will be running further consultations over the coming months, and I’d encourage you all to remain engaged with that process.
I look forward to working with you all as we will continue to push ahead and forge a more competitive, diversified export economy.
Thank you, and I look forward to the Q&A discussion.
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