ACS Launches 2002 ICT Trade Update
Friday 29 November 2002 - The Australian Computer Society (ACS) has called for urgent action by the Federal Government in response to today's release of the 2002 ICT Trade Update which revealed an ICT trade deficit of $14.4 billion for the 2001-02 financial year.
ACS President Richard Hogg said if the current trend prevailed, the deficit would nearly double by 2010 to reach $27.23 billion.
"The deficit in ICT trade should be of enormous concern to every Australian - not only the ACS and ICT professionals - accounting as it does for 65 per cent of our total current account deficit of $22.2 billion for 2001-02, and growing at an average rate of 8.34 per cent over the past eight years," he said.
"We simply cannot afford to allow this situation to persist since continued inaction by Governments at all levels will quickly see the deficit spiral further out of control. Any benefits that Australia might gain from being a proficient 'user' of ICT products are more than eroded by our massive international debt because of the quantity of ICT products and services that come from overseas."
The ACS-sponsored 2002 ICT Trade Update was written by Professor John Houghton of the Centre for Strategic Economic Studies. According to the report, Australia spent almost $20 billion on ICT imports in 2001-02, with ICT-related products and services accounting for around 13 per cent of Australia's total import debits. This is twice as much as we spent on imported motor vehicles that year.
During the same period, Australia exported ICT equipment to the value of $3.17 billion, representing around 3.6 per cent of Australia's total merchandise credits. However, over half of that - almost $1.7 billion - related to ICT equipment re-exports, or products which were brought into Australia and then re-exported with little or no value added to them. Australian-produced exports accounted for just $1.5 billion in value.
According to the report, re-exports accounted for:
The report found that the Australian ICT sector was hit hard by the economic downturn during 2001-02 with exports falling by 11 per cent in real terms (or 24 per cent if you factored in one-off sales related to the Sydney Olympics).
Mr Hogg said the falling export figure showed Australia's performance as an ICT producer continued to worsen.
"And yet during this time, Governments continued to ignore the situation, or is it that they just don't understand?" he asked.
"In 2000, Australia was ranked 24th among the 29 OECD nations in terms of our export/import ratio and these new results indicate that situation has probably deteriorated further. Added to that, our deficit on ICT equipment costs US$365 per head of population, compared to the OECD average of just US$38," he said.
"Both Government and industry stakeholders need to urgently examine these results and consider what measures might be taken to assist this critical sector in achieving more rapid and sustained growth."
Mr Hogg repeated earlier calls by the Society for the Federal Government to reinstate the full 150 per cent R&D tax subsidy without the onerous conditions that discourage companies from taking advantage of it.
"I am convinced that had the global ICT sector not been in decline, the ICT Trade Deficit recorded in 2001-02 would have been significantly higher than last year's record figure.
"If, as some analysts predict, corporations invest more heavily in ICT in the coming 12 months than we have seen of late, we could face an exponential rise in the deficit for 2002-03 unless real action is taken now to encourage the domestic industry," he said.
The ACS is providing copies of the 2002 ICT Trade Update to key players within the ICT industry and to State and Federal Government Ministers and their advisers within ICT-related portfolios, seeking to raise awareness of its concerns over the sector's future.
"Australia remains far too dependent on imports of ICT products and more must be done to encourage and nurture our local producers and to stimulate exports. We must identify and exploit areas of natural advantage where we can establish niche industries and centres of excellence that become global leaders in their own right, and this will only happen with strong backing from the Australian Government," Mr Hogg said.
According to the report's author, Professor Houghton, "The only real positive note in the data was the growing trade surplus in computer and information services, particularly in areas like database services and consultancy and implementation services.
"These stand out as the bright spot among what is otherwise rather depressing trade data and suggest this is an area where Australia should focus some attention in a bid to increase our competitive advantage," he said.
The 2002 ICT Trade Update Executive Summary is available online at: http://www.acs.org.au/ICT_Trade_Update_2002.PDF
Note: The 2002 trade deficit reflects a marginal change if the definition of ICT equipment used this year to bring it more into line with international practice. Applying the same definition last year would have reduced the reported deficit to $15.1 billion, discounting the one-off impact of the Sydney Olympics.
This media release is available on the ACS Web site at http://www.acs.org.au/news/291102.htm
ENDS
About the Australian Computer Society: The ACS is the recognised association for information technology (IT) professionals, attracting a large and active membership from all levels of the IT industry and providing a wide range of services to its 16,000+ members. A member of the Australian Council of Professions, the ACS is the public voice of the IT profession and the guardian of professional ethics and standards in the IT industry, with a commitment to the wider community to ensure the beneficial use of IT. See the ACS Home Page for more information.
Media Enquiries:
Richard Hogg, ACS National President, Tel: (0408) 549 531, Email: cnew@acslink.net.au
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