Green tape and Middle East conflict ‘stifling Aussie exporters’

Environmental standards and soaring labour costs are the among the key factors weakening international competitiveness for Australian exporters.

International shipping will be an ever present challenge for Australian businesses, ACCI boss Andrew McKellar said. Picture: Che Chorley

Environmental standards and soaring labour costs are among the key factors weakening international competitiveness for Australian exporters, who are also raising alarm over the cost of shipping and conflict in the Middle East as impediments to doing business overseas.

Nearly two-thirds of the businesses captured in the Australian Chamber of Commerce and Industry’s national trade survey said the increasingly onerous environmental, social and governance standards were a major or moderate concern.

ACCI chief executive Andrew McKellar said climate-related financial disclosures were putting particular pressure on businesses, with the measures set to capture smaller companies in coming years.

“The regulatory perimeters of that are progressively moving out, so by 2028 we’re going to be out to medium-sized businesses with 100 employees with revenue of $50m, while at the moment it’s 500 employees with a $500m turnover,” he said.

“That style of thing is an example of probably where that concern would lie.”

The ACCI survey was completed by 239 companies from mid-July to the end of August, with businesses indicating tensions between the US and China were among their top three global concerns, behind cyber security and the fallout of the Middle East conflict.

Increasingly onerous environmental, social and governance standards ‘are a major or moderate concern’. Picture: Zoe Phillips

Mr McKellar said Australian businesses were still “apprehensive” about the impact Donald Trump’s election victory would have and whether the US president-elect would impose tariffs on Australian exports during his term.

“There is a lot of thought and discussion about the risk of a significant slide back into global protectionism and the impact that punitive increases in tariffs from major trading nations could have,” he said.

“The business community is apprehensive about the risks that are there and how that plays out in practice.”

As an island-continent, international shipping would be an “ever present challenge” for Australian businesses, Mr McKellar said, with nine out of 10 of the surveyed businesses rating shipping and logistic issues as a major or moderate concern.

The figure comes amid calls for reform of coastal shipping rules and changes to the Coastal Trading Act to help make it more economical to move goods interstate.

Australia’s shipping fleet fell from 55 registered major trading ships in 1996 to 21 in 2011 and has since dropped further to nine.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar. Picture: Martin Ollman/NewsWire

On the issue of labour costs as an impediment to international trade, Mr McKellar admitted that there was no way that Australia could be competitive with other countries, which paid well below the minimum wage, and urged instead for a focus on boosting productivity.

“If we have high productivity, then that means that we can compete with more economies on lower costs, because output is … proportionally higher,” Mr McKellar said.

Jim Chalmers last month announced the commonwealth would set up a $900m fund to incentivise states to invest in initiatives that would boost productivity.

Mr McKellar said he was glad to see productivity being put on the agenda, but it was currently only making a “cameo appearance” and much more work needed to be done.

“It’s not the main star yet, but it’s better that we’re talking about these issues than ignoring them completely,” Mr McKellar said.