IN JULY 1971 I joined the exports transportation branch of the then Department of Trade and Industry in Canberra headed by Sir Alan Westerman. Interestingly Max Moore-Wilton (a future boss of ANL) was a section head in the same branch. However, it was to be the start of my 47-year career with the shipping industry.
At the beginning of 1972, the Whitlam Labor government came to power and the branch was transferred to the then Department of Shipping and Transport (later to become the Transport Department which also incorporated the Department of Civil Aviation).
I was transferred to the export finance and insurance section in the Department of Trade and Industry which, among other things, administered the export market development grants scheme which has been significantly watered down over the years. I was involved in the government’s decision to convert the Export Protection and Insurance Corporation to the Export Finance Insurance Corporation which has helped many exporters break into higher risk overseas markets.
Treasury and Trade
The two most powerful departments in Canberra post-World War Two and up to the early 1970s were Treasury (there was no separate finance department) and the Department of Trade and Industry.
Treasury opposed many concepts put to government by DoT&I, but under the then minister Sir John ‘Black Jack’ McEwen, the government accepted most initiatives.
In July, 1972 I joined the liner branch in the Transport Department and remained until I joined the Australia to Europe Shipping Conference as assistant director in 1981. An important objective of the International Liner Conference system was promoting and facilitating overseas trade. The system was supported by the Australian government and many overseas governments. The Australian government passed legislation in 1966 to support their operations with limited exemptions from subsequent competition legislation. There have been six major reviews of this legislation but with a number of amendments it remains to this day. The ACCC has released a discussion paper on removing that legislation and replacing it with a class exemption. In developing that exemption, it is hoped trade remains a prime objective.
Structural change and Austrade
The DoT&I was eventually broken up with Industry established as a separate department and the Department of Overseas Trade was created. This emphasised the importance the then government accorded overseas trade and there was a world-class system of trade commissioners working hard in our overseas embassies to support our exporters.
In July 1987, the Hawke government amalgamated the then Department of Trade and the Department of Foreign Affairs to form the Department of Foreign Affairs and Trade or DFAT. There were benefits for sharing resources and ensuring foreign policy and trade policies were aligned. However, I would contend there were disadvantages with possible conflicts when promoting and facilitating trade in countries that may clash with our foreign policy objectives. A department dedicated to promoting trade would be more effective in focusing on that objective and necessary logistics arrangements, including international shipping policies.
Austrade was established under the Australian Trade Commission Act, 1985 and was located in the Industry portfolio before moving to Foreign Affairs and Trade in 1991. In that year, its headquarters moved from Canberra to Sydney.
In May, 2016 the Act was amended to the Australian Trade and Investment Act to reflect the emphasis on attracting and facilitating foreign investment into Australia. Austrade has been effective. But the question is whether it could have been even more effective and focused if it was in a separate Department of Trade?
Getting value from trade
Australian governments have rightly focused on expanding our free trade network but what are the KPIs to assess their effectiveness and what arrangements are there to exploit their potential? Pursuing free trade agreements could perhaps be put aside for a time until we are sure we are making best use of existing agreements. I believe there has been for a long time a gap in assessing government policies and ideas that could impact on our overseas trade and the shipping arrangements that support it. One example is the proposed tax to raise funds for biosecurity rather than levies that are cost recovered and accountable.
The government established an industry group to review the proposal and subsequently established an industry advisory panel without representatives of the shipping industry and ports. Have trade impacts again taken second place?
Trade minister Simon Birmingham is enthusiastic about our overseas trade. But is the advice he receives focused on making our logistics systems more productive? A separate Department of Trade would help. It definitely did so in the past.
* Llew Russell is a former chief executive officer of Shipping Australia
This article appeared in the February 2020 edition of DCN Magazine