Austrade under fire: Austrade came under heavy criticism last year after the release of an unflattering Productivity Commission report, sparking off conjecture that a major restructure was on the way - Overseas Trading - Australia - Brief Article

Business Asia, Feb, 2002 by Randolph Ramsay

NOVEMBER 2001 was a sorry month for Austrade. The Federal Government's peak export facilitation body was hit by a barrage of criticism following the release of a Productivity Commissio (PC) n research paper critical of its effectiveness. The internal staff research paper found that over a third of Austrade's $350 million marketing budget did not benefit Australia's export effort. It also played down the effectiveness of the $150 million a year Export Market Development Grant (EMDG), saying Austrade's estimates that every dollar spent on the program returned $12 were inflated, and that the real return was closer to $6.

Media analysts from around the country started to question Austrade's overall effectiveness, and rumours started circulating around the export community of possible changes to Austrade's structure and functions. Some even whispered about a complete revamp of the organisation.

Federal Trade Minister Mark Vaile, speaking exclusively to Business Asia with Overseas Trading, has quashed rumours that the Government was looking at "rejigging" Austrade.

"Suggestions that the structure or operations of Austrade were being reviewed as a result of the Productivity Commission report are incorrect," he said. "As a normal part of continuous improvement, Austrade has an ongoing program of internal reviews of procedures and operating systems, but there is no overall review of structure or operations."

The Minister's recent comments follow on from his strong support of Austrade in November last year when news of the critical PC report first broke.

For its part, Austrade questioned the validity of the PC report. Austrade chairman Ross Adler said the PC document was only a staff research paper that appeared without the input or involvement of Austrade. A PC spokeswoman distanced the organisation from the report, saying "its views were not those of the Productivity Commission". The report itself looked at all Government business grants, and not solely at Austrade's.

"PC staff have used a 1998 ABS survey to question the worth of Austrade," Adler said. "In fact, an important point that was overlooked is that the same ABS data reveals that intending exporters who use Austrade's services have a 47 per cent success rate when they go international, compared to a 11 per cent success rate for intending exporters who do not use Austrade."

Minister Vaile also criticised the use of the PC report as a gauge of Austrade's effectiveness.

"The paper is a staff research paper and not an actual evaluation of business programs," he said. "The authors also emphasise that the study should not be used to make any value judgment about whether the programs were `value for money'."

As for the EMDG scheme, Vaile says the Government has "full confidence in the value of the scheme to Australian exporters and in Austrade's administration of the scheme".

"No further review of the scheme is warranted at this point in time," he said.

For the most part, Australia's exporting community are also behind Austrade. Exporters and exporting organisations contacted by Business Asia with Overseas Trading have been supportive of Austrade's role in pushing exports. In a sign of Austrade's deep involvement within the export community (or perhaps a sign of its wide-ranging influence), very few of the many organisations contacted by Overseas Trading were willing to seriously criticise Austrade, let alone map out ways for it to improve.

There are, however, cracks in Austrade's armour. One exporting organisation head who did not wish to be identified bemoaned the difficulty involved when first contacting Austrade. He said while all his experiences with Austrade had been positive, he knew of other businesses who were "turned off" exporting because of the negative experience they had at the Austrade call centre level. Another exporter complained of the lack of information available about Austrade's many programs.

Despite this, Austrade and the Government are convinced that when it comes to export facilitation, Austrade has the runs on the board.

Adler said Austrade assisted Australian companies make export sales of $9.3 billion last year.

Trade Minister Vaile has reiterated his strong support of Austrade, as well as for its outgoing boss Charles Jamieson, whose $430,000 a year salary was also questioned by media analysts after the PC report was released last year.

"Austrade in its current structure, and its management, retains the full confidence of the Government to act as the Government's primary export facilitation agency," he said.