Today the Treasurer, Joe Hockey, and the Minister for Trade and Investment, Andrew Robb, announced a Productivity Commission review that will aim to boost Australia's services exports.
Services account for approximately 70 per cent of the Australian economy but only represent 20 per cent of Australia's total exports, indicating massive export growth potential.
With over 1.5 billion people moving into Asia's middle class over the next 15 years, we need to ensure Australia is in the best position to take advantage of the opportunities at our doorstep.
Now is the time to diversify and strengthen our export industries to capitalise on the growth in our region.
Industries such as education are already benefitting from this growing Asian demand, with exports in that sector doubling over the last 20 years.
Australian businesses involved in the delivery of services such as tourism, financial services and health care have enormous growth opportunities across Asia.
This Government’s Free Trade Agreements with China, Japan and Korea, and the work towards securing a new agreement with India, will facilitate these opportunities for growth.
The review's findings will be considered in the context of how we can further boost Australian services exports, helping to grow the economy, increase jobs and support our economic future.
The Productivity Commission is due to report within nine months.
Public consultation will be undertaken as part of the review, with information available at www.pc.gov.au.
The Terms of Reference for the review are attached.
Productivity Commission study into barriers to growth in Australian services exports
Terms of Reference
I, Joe Hockey, Treasurer, pursuant to Parts 2 and 4 of the Productivity Commission Act 1998, hereby request that the Productivity Commission undertake a research study into barriers to growth in Australian services exports.
Service industries are a large and growing share of the Australian economy and world trade. While services account for approximately 70 per cent of the Australian economy, they represent only 20 per cent of Australia's total exports indicating there is scope for significant growth. Some service industries are subject to extensive regulation and barriers to entry. The Government considers there is scope to reduce these and other barriers to growth.
Scope of the research study
In undertaking the study, the Commission should:
- Consider recent trends in services exports by Australian suppliers, and draw on case studies and other material where relevant to look at drivers of Australian services exports. The study should focus on the education, financial services, health services, information technology, professional services, and tourism sectors.
- Examine the domestic barriers to growth in Australian services exports, including any investment barriers, and consider appropriate policy remedies.
- Examine barriers to growth in Australian services exports in economies with which Australia does not have free trade agreements/economic partnership agreements in force or substantially concluded and which are ranked in Australia's top forty trade partners.
- Provide an assessment of the economic benefits of removing or reducing the barriers to Australian services exports in these markets.
- Examine, where relevant, the experience of other international economies in developing policy approaches in this area.
The Commission is to undertake an appropriate public consultation process and release both a draft and a final report.
Noting that the Commission has recently commenced research in the international education services and tourism sectors, in undertaking this study the Commission should avoid duplication of that work and draw on it as appropriate in its final report.
The final report should be released within nine months of receipt of these terms of reference.