“With concern about trade barriers stemming from Brexit and the Trump Presidency, Australia should focus on engagement with its immediate region where economic growth opportunities are substantial,” CEDA Research and Policy Committee Chairman, Professor Rodney Maddock said.
“Outbound investment from Australia is currently more than $540 billion per year and the top three recipients of Australia’s outbound investment are currently the US, the UK and New Zealand.
“However, the amount that flows to China and India combined only accounts for 2.9 per cent of Australia’s total outbound investment.
“These are significant emerging markets with an exploding middle class demanding higher quality products and services. This represents a huge opportunity for Australia.
“Language and significantly different regulatory and operating environments have dissuaded Australian companies in the past but there needs to be more focus on encouraging greater investment in these markets and assistance to smooth risks and barriers.
”Professor Maddock said outbound investment is often viewed negatively as a means of offshoring local jobs.
“In reality, it can deliver significant economic benefits to the Australian economy and in fact create jobs both here in Australia and abroad,” he said.
“Outbound investment by Australian companies can provide access to global value chains and increase demand and awareness of Australian products and services.
“The CEDA report recommends that the Federal Government needs to better articulate the economic benefits of outbound investment.
“Internationally and here in Australia we have seen calls to move away from globalisation. However, the lifting of trade barriers and integration of Australia into the global market place has resulted in the biggest increase in our living standards in history.”
Professor Maddock said the CEDA report also recommends that the Productivity Commission should examine the effects of the Australian taxation system on outbound investment.
“There have been conflicting views on whether the Australian taxation system is biased against outbound investment, in particular the effect of the current dividend imputation system,” he said.
“This should be properly examined as part of the Productivity Commission’s paper on Australia’s trade policy.”
Professor Maddock said Australia has the opportunity to be a premium food provider for Asia and the CEDA report also recommends setting up food processing clusters in Australia, with products then integrated into Asian markets.
“The CEDA report also found there is significant opportunity for Australian outbound investment in distribution systems for chilled and fresh foods in Asia, which remain poor,” he said.
Outbound investment is being launched in Melbourne on Thursday, 27 April, 2017.
Speakers include three contributing report authors:
The launch event will be followed by a series of events being held in Sydney, Adelaide, Perth and Brisbane in May.
Read or download Outbound investment
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CEDA – the Committee for Economic Development of Australia – is an independent, not-for-profit membership organisation.