Export initiative backed by latest report

The export of financial services from Australia could assist in addressing the nation’s ongoing current account problems, according to further research commissioned by the Investment and Financial Services Association.

The research, undertaken by Canberra-based economic consultancy Access Economics, points to the fact that the underlying structure of Australia’s current account has deteriorated recently and is likely to be exposed in coming years when industrial commodity prices pull back to more sustainable levels.

“A more diversified export base is needed and there is a strong likelihood of a significant depreciation of the exchange rate arising as part of the adjustment,” the Access Economics analysis said.

“This would provide a further impetus for the development or expansion of non-traditional exports including funds management services.”

The research report points out that there are many dimensions of the funds management industry and that Australia will not be able to compete internationally on all fronts.

However, it said there was still a wide range of opportunities for Australian or Australian-based institutions including providing services associated within the region.

The report said that no single policy initiative had been identified that was likely to provide the catalyst for a rapid expansion of exports of funds management services and, instead, action was warranted on a number of fronts including clarifying and streamlining taxation arrangements, improving transparency with respect to what services are involved, taking advantage of Australia’s robust regulatory system and co-ordinating promotional efforts.