Barriers to growth in service exports: draft report

In: http://apo.org.au/node/57020

Abstract

Key points The total value of Australian service exports was $57 billion in 2013-14 and about 17 per cent of total exports. The six services sectors covered in this study — tourism, education, financial services, professional services, information technology and health services — accounted for around 85 per cent of the total value of service exports. The total value of service exports from all sectors has doubled (in real terms) over the past two decades. Rising household incomes, particularly in some countries in Asia, have been an important driver of increasing global demand for services. Visitors from Asia account for much of the growth in Australian tourism and education exports over the past decade. The costs of exporting services have fallen due, in part, to lower airfares and the development of internet tools including email, online video and audio calls, and electronic payment systems. The priority for the Australian Government should be policy reform that promotes competition and provides incentives for domestic firms, including in services sectors, to innovate and lift their productivity. Specific reforms to reduce domestic barriers to service exports include: implementing visa processing arrangements for short-term visitors and international students that are no more onerous than is necessary to meet a single policy objective of immigration integrity liberalising air services arrangements for the major gateway cities of Brisbane, Melbourne and Perth and, following this, Sydney — unless a published assessment shows the costs of liberalising access to Sydney Kingsford Smith Airport would outweigh the benefits to the community simplifying Australia's regime of withholding taxes through greater uniformity in the rate applied to different types of investment and reducing the range of exemptions implementing consistent screening thresholds for Foreign Investment Review Board examination of foreign investment proposals across investors from different countries. International barriers to services trade can be ...