Technology, innovation key to Asia ties: Bracks: Victorian Premier Steve Bracks is keenly aware of the importance Asia plays in his State's trade health. In this Business Asia Exclusive, Premier Bracks discusses how he plans to foster Victoria's Asia links - Victoria In Focus - Statistical Data Included

Business Asia, May, 2002

Q: What are Victoria's key strengths in terms of trade at present?

Certainly the automotive sector is a source of great pride for our Government, with recent major investments in automotive plant capacity that are mostly export focused. Holden Limited (a General Motors subsidiary) has recently committed to a $700 million expansion in engine building capacity to supply V6 engines to the rest of the GM world. Ford has also invested $500 million in some exciting new projects, and Toyota continues to export very significant numbers of passenger vehicles to the Middle East and elsewhere.

But the picture is very exciting in other sectors too. Victoria's strength in biotechnology just keeps on growing. The Deloitte Biotech Index shows that our state is home to more than 56 per cent of Australia's biotech sector, as measured by market capitalisation. Some very exciting scientific research is going on in this state and that will only increase with time.

Continuing expansion into the Asia-Pacific region remains a priority.

We are also a major provider of educational services to the Asia-Pacific region, and we are proud of the fact that so many young people come here from overseas to gain their degrees. They contribute to our economy whilst they are here and then -- in most cases -- go home and think warmly of Victoria throughout their future careers. Good relationships with our neighbours are very important to Victorians.

Q: What major business developments are planned for 2002 and beyond?

Perhaps the most significant to know about Victoria is that our Government is striving to make this State the most competitive place to do business. We have just lowered business taxes for the second year running, with significant cuts to payroll tax (and more planned in 2003). We have also increased the payroll and land tax thresholds that free up many small businesses from the burden of payroll and land taxes altogether.

Overall we have reduced business taxes by more than $1 billion since taking office in October 1999.

On the technology front, one of the most exciting developments is the construction of Australia's first Synchrotron. This massive piece of technology infrastructure promises to create an enormous burst of energy and activity in the medical, biotech and chemical research industries by giving our scientists a tool that revolutionises the way in which basic research can be done. Our Government has injected more than $150 million into the Synchrotron project, and by 2004 when the facility is operational, we expect our R&D sector will become truly competitive with the best in the world.

Q: How does your recently released Business Statement affect the export sector?

Exporters in Victoria are enjoying boom times. Exports of goods from Victoria grew to $22.5 billion in 2000-01, a 36 per cent increase in just two years. Our work promoting Victoria overseas is continuing, with trade fairs and missions receiving strong government support. Hundreds of companies, large and small, enjoy exposure to overseas markets through our Government's help in showcasing their skills and products overseas.

In our April 2002 Business Statement, we have directed additional new financial support into the strategically important areas of micro-technology, precision engineering, food, pharmaceuticals, aerospace, new materials and environmental technologies to promote Victoria's capabilities in offshore markets. Given that we were able to directly facilitate more than $800 million of new exports for Victorian companies in 2000-01, we are very confident about these new measures.

Q: How important is Asia to the Victorian trade sector?

Because of our position in the region and the closeness of our existing ties with many Asian economies, continuing expansion into the Asia-Pacific region remains a priority for the Victorian Government. We have an excellent reputation as a supplier of high quality food products to many Asian countries, especially Japan. Dairy exports are a particular strength for Victoria.

Defence industries are another sector where Victoria's innovation is leading to strong alliances. For example, Victoria's aerospace capabilities have resulted in a joint promotional partnership being formed between leading Victorian aerospace and aviation manufacturers and the Singapore Economic Development Board. This will jointly boost exports of aerospace technology throughout the region.

The key to our future relationships within Asia will be our emphasis on technology, innovation, being competitive and cooperative with our neighbours in sharing the benefits of our success.

Q: What do you perceive to be the key growth areas within the Asia region?

China continues to provide major growth opportunities across Asia, although many smaller economies in Asia, such as Malaysia and the Philippines, have some exciting strengths that are of great interest here in Victoria.

We are also determined to build on our own strengths in high value, high technology industries that rely on research and development and which create jobs for highly skilled people.