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Australia is in danger of slipping down the global trade ladder unless it completely overhauls its tax and industrial relations sectors, recruits skilled migrants, banishes red tape, improves its internet services, and reduces its reliance on China.
That’s the blunt message from University of South Australia (UniSA) Professor of International Business, Susan Freeman.
Freeman is the principal author of the 2021 Australian Chamber of Commerce and Industry National Trade Survey Report, officially launched by Federal Trade Minister Dan Tehan yesterday (Friday).
The survey reveals that Covid has been a mixed blessing for Australian businesses. It has highlighted the nation’s reliance on global supply chains and lack of sovereign capability, decimated the tourism and international education sectors, but also given the manufacturing and e-commerce sectors a chance to shine.
Heightened geopolitical tensions and a serious trade war with China in the past 12 months have exposed Australia’s vulnerabilities, Prof Freeman noted, but even more concerning are the key trade issues cited by business leaders.
“Five trade reports have been produced over the past six years, reflecting the concerns of small, medium and large businesses in Australia. Every year the same issues are raised, which shows they still haven’t been addressed by successive State governments and the Federal Government,” she said.
“Australian businesses are adaptable, entrepreneurial, innovative and smart. The problem is not solely with them, but with entrenched structural issues that need urgent reform.”
Among the main obstacles identified by more than 200 business leaders in the Fifth Trade ACCI Report are: Inability to compete in global markets; Red tape; Non-tariff barriers such as quotas, embargos, sanctions and levies; High exchange rates; Strikes and industrial activity; High cost of labour and lack of skilled workers; Over-reliance on China and very little engagement with Europe, Africa and Latin America; Too much emphasis on minerals and not enough on renewable energy sources.
Prof Freeman also interviewed more than 30 senior managers, CEOs, founders and export managers, some of whom highlighted the domestic industrial action at shipping ports which coincided with the outbreak of Covid-19 in February 2020.
“Ongoing maritime strikes have compounded the supply chain disruption for Australian businesses during the pandemic, which has made life even more stressful for companies reliant on goods either coming in or going out,” she stated.
“If you’re waiting up to six weeks to get things moved from our own ports, that is not a reflection on businesses. That is something that is completely within the control of Federal and State Governments – to better manage industrial relations. It needs a government and industry joint effort.”
Closing Australia’s borders in 2020 was a necessary step, Prof Freeman emphasised, but the longer they remain closed the harder it will be for businesses to compete.
“Australia needs access to highly skilled, quality people. If you shut interstate and international borders indefinitely you not only make it very difficult for firms to fill key roles but you also risk being left behind by the rest of the world whose borders are opening.
“We are an island, which has some advantages in a pandemic, but there’s a downside. Because we are not sitting in the middle of Asia or Europe, surrounded by other countries, it is incredibly important we remain connected,” she said.