Bruce Baird (Cook, Liberal Party) Share this | Hansard source

On behalf of the Standing Committee on Economics, Finance and Public Administration, I present the committee’s report entitled Servicing our future: inquiry into the current and future directions of Australia’s services export sector, together with the minutes of proceedings.

Ordered that the report be made a parliamentary paper.

It is my pleasure to present this report to the House today and to commend the secretariat of the economics committee—Stephen Boyd and Andrew McGowan in particular, but the rest of the staff also—on a very professional piece of work in terms of the report before the House. When people think about the Australian economy, thoughts usually centre on the agriculture and mining sectors, but it is in fact the services sector which dominates Australia’s economy, accounting for around 75 per cent of output and 85 per cent of employment. Exports of services account for more than 20 per cent of total exports—much more than rural exports, and of a similar size to manufacturing exports.

The inquiry was referred to the committee by the Treasurer, the Hon. Peter Costello MP, in May 2006. The committee was tasked with identifying the challenges posed to the sector by the resources boom as well as highlighting issues and opportunities for the sector into the future. The report title, Servicing our future, is indicative of the committee’s view that services exports will become increasingly important to the Australian economy.

The resources sector is currently experiencing a well-publicised boom. A boom is by definition a temporary occurrence, but predicting how long it will last is very difficult. Indeed, most of Australia’s leading economists have made incorrect forecasts about the length of the boom. Commodity prices have stabilised over the past year but remain around their peaks. It is unlikely that demand from China and other emerging economies will subside anytime soon. However, a huge amount of mining investment continues to occur around the world, indicating that the world’s mining capacity will increase markedly in the coming years. As capacity increases, some fall in commodity prices is likely. If, as a result, the Australian dollar depreciates there will be increased opportunity for Australia’s other export sectors, including services.

It was evident throughout the inquiry that there are a number of issues relevant to the services sector as a whole. This degree of commonality gives cause for the committee’s recommendation for a minister for the services sector. The committee believes that the sector would benefit from enhanced government recognition and coordination.

An issue common across the services sector is the shortage of skills and labour. The strategies to make training more flexible and relevant are undoubtedly the most important solution to the shortage. However, because of the time it takes to learn new skills, training cannot provide solutions to the shortages that exist now. The committee believes that there is a need to introduce a program of lower-skill migration to fill shortages in industries such as tourism.

Inbound tourism is Australia’s biggest services export and amongst the top export earners across all industries. The industry set new records in terms of arrivals and exports in 2005-06, but in real terms it has performed modestly since the Olympics. The committee believes that, given its importance and recent variable performance, there is scope for an independent examination of the future of inbound tourism.

The committee believes that the issue of rogue operators in the tourism industry must be addressed. The industry cannot afford to continue to have its reputation compromised, and, as importantly, international tourists should not be subjected to illegal practices. The committee is concerned by the ACCC’s inaction on this matter and recommends that more federal and state resources be committed to eradicating rogue operators.

I would like to thank my colleagues the members of the committee for their cooperation and dedication to the task in preparing this in a very bipartisan way. International education is the second largest services export. A $10 billion industry in 2005-06, the industry is expected to continue good growth in the near term but significant competitive challenges are on the horizon.

The committee received evidence on a range of other service industries during this inquiry. In general these industries are important domestically, and there appears to be scope for them to significantly increase their level of exports. The common growth-constraining issue was non-tariff trade barriers. The committee recommends that the government give greater priority to services trade issues in future trade negotiations. Finally, on behalf of the committee, I would like to thank the organisations and individuals that participated in this inquiry, and the members of my committee in producing this report. (Time expired)

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