Victoria’s imports outpace exports as deficit grows

Long gone are the days of Victoria’s manufacturing powering the region, with the state labelled a ‘parasite’ due to its hefty trade imbalance. Worse yet, the deficit is still growing.

Manufacturing taking place as Nissan Casting Australia is largely outweighed by Victoria’s imported goods. Picture: supplied.

Victoria’s reputation as a manufacturing region has taken a battering with figures showing the state imported $54 billion extra in goods and services than it exported last year.

Cars, fuel and electronic equipment dominated imports, while Victoria’s main exported goods were wool, meat, dairy and pharmaceutical products.

In 2017-18, the state’s biggest export success was not a manufactured item — $10.6 billion was earned from foreign students attending our universities and other educational institutions according to federal Department of Foreign Affairs and Trade data.

But even that bright spot cannot disguise the fact that last year Victoria imported goods and services worth $105.7 billion, but managed only $51.5 billion in exports.

Dr Bob Birrell has labelled Victoria a “parasite city-state” because of its huge trade imbalance.

Australian Population Research Institute director Dr Bob Birrell said Victoria’s huge trade imbalance made it a “parasite city-state”.

“Victorians were promised that under economic reforms of the past, the state would become a key exporter of knowledge intensive goods and services,” he said.

“This has proved to be false.”

Dr Birrell said the problem was highlighted by the deficit in so-called elaborately transformed manufactures, which include products like cars, machinery, electronics and clothing.

“Last year, our ETM imports increased by 9.9 per cent to $56.2 billion, while ETM exports remained steady at only $7.7 billion,” he said.

“The ETM deficit is actually growing, and that’s because most of the industries that did have the capacity to export — including the car and telecommunications industries in bygone days — are mostly gone, and new ones have not emerged.”

China accounted for $20.2 billion, or a quarter of the total value of goods imported by the state in 2017-18.

Trade Minister Martin Pakula said Victoria is “backing competitive industries”. Picture: Dave Cairns

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China was also Victoria’s biggest customer for exported merchandise, with $6.4 billion in sales.

And the Communist nation would have been responsible for a big chunk of the $10.6 billion in export revenue that the state reaped from foreign students attending our universities and other institutions.

Trade Minister Martin Pakula said Victoria’s economy had grown by more than 477,000 jobs since Labor was elected in November 2014.

“Victoria’s advanced manufacturing sector and next-generation industries are strong and getting stronger every day,’’ Mr Pakula said.

“We’re backing globally competitive industries like biotech and information and communications technology that create the jobs of the future.”

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