Craig Emerson (Rankin, Australian Labor Party, Minister for Trade) Share this | Hansard source

I thank the member for Fowler for his longstanding interest in the activities of Austrade and most particularly his interest in the role that Austrade can play in lifting some of the poorest nations on earth and their people out of poverty. Sometimes we look at these things too mechanistically. The truth is that a great institution like Austrade can do its very best for Australia but, with trade and development, these are not zero-sum games. You can actually create wins for everyone through the gains from trade and through technical cooperation.

The member for Fowler asked me to elaborate somewhat on the rationale behind the shift in emphasis of Austrade. I will give the member for Fowler a couple of examples. I said earlier that the institution had been loaded up with a lot of extra responsibilities but no-one had really said to it, 'We're now going to reduce that load.' That is what we have now said. The previous government had a target of doubling the number of exporters, which led to Austrade being obliged to go around trying to get someone to export something because that meant there was one more number in a box. It was not, therefore, primarily concerned with the ongoing sustainability of that export activity. If they could get them to export something, that was a pat on the back and a tick in the box. We have now relieved Austrade of that responsibility and instead acknowledged that, in these so-called frontier and emerging markets, if you can imagine a single Australian business going into those markets, the information costs are very, very high for a single business. They would need to know not only about the government of that particular country but also about the provincial governing arrangements—all the regulations of a country just emerging and starting to grow strongly but in which there is great potential for Australian business and the gains from trade. Those search costs, if you like, can be prohibitive for a single company or two companies. But if Austrade is in there and working with the local authorities at the national and subnational levels, that of course means it can generate that information and make it freely available not only to one or two companies but to all comers. So the whole concept here is of reducing the high search costs in these emerging or frontier markets which would otherwise be prohibitive for a single company. For the more mature markets, yes, there is still a role for Austrade, but it is not as pressing, given finite resources, when you have commercial agents in those countries who can introduce businesses that are hoping to export to potential importers and customers more generally.

So this shift is designed to get ahead of the game, to anticipate the development opportunities in countries such as Mongolia and regions such as Central Asia, Africa and Latin America. Most pertinent, in terms of a recent visit I paid to provincial parts of China, is, again, that the search costs can be quite high. That is what we are doing, Member for Fowler.

I was delighted with the public response to the review, because you can easily anticipate that the public and business organisations would say, 'Don't reduce anything; just keep increasing.' They recognised that there are finite budgetary resources. All the industry associations applauded and supported the refocussing so that Austrade does better those things for which we give it responsibility. That is how we are managing that reform. I pay tribute to Peter Grey, the CEO of Austrade, who initiated that reform. When I became the Minister for Trade I helped steer it, and we are, I think, going to achieve a very, very successful outcome.

Finally, in relation to Mongolia, we pre-announced our interest when the government of Mongolia was represented here in Australia, and they were delighted. So it is about anticipating where the big opportunities will come from. I will finish where I started: it is not only good for Australian businesses but good for economic development in those countries with emerging markets.

See this speech in context