Victoria sets ambitious trade targets; echoing a similar push by the Federal Government, Victoria has set itself the deadline of 2010 to double the number of exporters from the State, Business Asia asked Premier Steve Bracks to outline how he aims to meet this ambitious target - Victoria In Focus - Interview

Business Asia, May, 2003

Q: A significant amount has been invested in improving Victoria's capabilities and attractiveness to offshore markets. How have recent world events (eg Iraq war, SARS, global economic downturn) affected interest from other regions, particularly Asia?

A: As an open modern economy, Victoria is inevitably affected by economic developments elsewhere in Australia and overseas. While Victorian exports of goods rose 35 per cent and export of services rose 15 per cent from 1998-99 to 2001-02, the drought, the world economic slowdown and the rising Australian dollar have curbed growth in recent months.

However, Victoria's overall trade and investment performance has held up remarkably well during recent unsettled times. This reflects good investment fundamentals, a strong budgetary situation, an established reputation as a stable and safe location, and an innovative and globally focused manufacturing and services sector.

Solid economic growth is projected in Victoria despite the subdued global economic recovery. A robust 2.75 per cent growth rate is expected in 2002-03, allowing for the impact on exports of the drought and a weaker than anticipated international economy. Economic growth in Victoria is forecast to rise to 3.75 per cent in 2003-04, as exports recover following the end of the drought. Victoria grew 4.9 per cent in 2001-02, or one per cent faster than Australia.

Currently available economic indicators show that economic growth continues. Private business investment was 17.3 per cent higher over the past year. The value of total building approvals in the year to February 2003 was 10 per cent higher than a year ago.

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Q: What key export markets will be focussed on this year?

A: To encourage export growth, the Victorian Government has committed $3 million over three years to develop an "Opening Doors Export Plan". The plan, which will be implemented in 2004-05, aims to: achieve an export target for Victoria of $30 billion by 2010; and double the number of Victorian companies involved in exporting activity by 2010.

The Open Doors Export Plan will target new and emerging export markets, the first being China where the Victorian Government is establishing a new Business Office.

In August last year I announced the establishment of a new Victorian Government Business Office in Nanjing, China. China and Hong Kong together represent Victoria's largest trading partner, with trade more than doubling over the past five years, reaching $5.3 billion in the year ending 30 June 2001. China is an emerging source of investment in Victoria, and the new office will focus on investment attraction and to further develop trade opportunities following China's recent entry into the World Trade Organisation and its securing of the 2008 Olympic Games. The traditional export markets in South-East Asia remain vital to Victoria. The Victorian Government's Overseas Trade Fairs and Missions program will reflect any such developments.

Q: What are Victoria's strengths compared to the rest of Australia?

A: Victoria is Australia's standout economy, growing by 4.9 per cent in 2001-02--well above the national growth rate of 3.9 per cent. Victoria is also Australia's innovation State and, according to the latest Australian Bureau of Statistics R&D figures (for 2000-01), was a leading State in business R&D expenditure in 2000-01 with $1.6 billion, accounting for 35 per cent of total national expenditure.

Victoria is a key regional centre for industries that drive innovation, and is home to:

* 57 per cent of Australia's automotive production market;

* 40 per cent of Australia's aerospace industry;

* one-third of Australia's ICT-industry; and

* one-third of Australia's dedicated biotechnology companies.

Other industries in which Victoria is a major national player include financial services, agribusiness, food processing and tourism. Victoria also has Australia's only curfew free international airport and Australia's largest container port all linked to each other and the rest of Australia by a world-class transport road and rail network.

Q: What major developments are in the pipeline for Victoria in terms of business?

A: We will shortly establish a dedicated investment attraction agency, Invest Victoria, as the centrepiece of our investment attraction strategy. This is an exciting initiative that will promote Victoria in key international markets and provide a single entry point for investors in the State. We have ambitious goals for Invest Victoria. For the 2002/03 calendar year, we aim to achieve $1.2 billion in new investment, $600 million of exports and 4000 new jobs. By year four of operation (2006/07), we want to deliver an extra $600 million of foreign direct investment.

We have also committed over $900 million to innovation initiatives--the largest such commitment by any Australian State--with a special focus on ICT, design, new manufacturing technologies, environmental technologies, and biotechnology.

These are all industries where we have core strengths with the potential to deliver significant economic and social benefits--not only in themselves, but also across other industries and sectors.