The Sydney Morning Herald, Michael Pascoe, 8 March 2016
One of the problems with our attention-deficient, spoilt-brat markets and general economic commentariat is that punters demand immediate results from fundamental shifts. The real world doesn't operate like that.
For example, "everyone" knows the story of Australian exports: we'll all be ruined because iron ore and coal prices have crashed and LNG isn't far behind. And it would be a big leap of faith to think this week's commodities spike is changing that.
But there's much more happening than the headlines suggest.
Services export growth has been quite spectacular, led by tourism but increasingly supported by education. Foreign student enrolments were up by nearly 10 per cent last year to 645,185, topping the previous record set in 2009 and 300,000 more than a decade ago.
Agricultural exports are also picking up nicely as the weaker dollar does what it's supposed to do and our growers take advantage of new free-trade agreements. Wine exports to China are a case in point.
And now Efic, the government's trade finance body, believes manufacturing exports are about to follow suit.
Hang on, Australian manufacturing? You've probably been told it doesn't exist anymore. That's not so. It's been bashed and battered and shrunken by the period marked by a strong currency, but that which hasn't killed it has made it stronger.
I should declare two things at this point: first, I have a soft spot for Australians taking on the world as exporters. They have the best stories, they want to be the best, they have to be the best, they have spirit and drive and self-belief. They're tough and resilient. Exporters tend to be uplifting types to be around. They're adventurous, inculcated with what we might like to believe is a very Australian trait: being willing to have a go.
Second, Efic hired me to facilitate discussions with exporters at their annual SME briefings around Australia. It's a nice job to have.
Efic (you might know it by the old Export Finance Insurance Corp moniker) has a refreshed remit from the government to concentrate on small and medium enterprises. It's walking that talk, doing more dollars with SMEs in the first half of this year than it did in total two years ago. SMEs, rather obviously, tend to need more help with their trade finance than bigger players, but a surprising ANZ survey found that SMEs also tend to get quicker results in Asia than the big boys.
Efic CEO Andrew Hunter is showing the briefings how our weaker dollar is steadily kicking in to help our exporters
The Efic story is that there is a lag between the Aussie dollar depreciating and manufacturers making the investments they need to get back into the game after being smashed by the days of an expensive currency. Hunter expects manufacturing will follow much the same curve as services and agriculture.
Growing manufacturing exports, coming off such a low base, won't go anywhere near making up for the impact of our lower terms of trade on national income, but their recovery is part of the broader stirring of animal spirits we need.
It's part of what RBA deputy governor Phillip Lowe was on about in a (characteristically) cautiously optimistic speech on Tuesday morning.
"We should be able to look forward to somewhat better outcomes than over the recent past. We could expect that the drag on our national income from falling commodity prices will eventually lessen. And if current trends in employment continue, we could look forward to some further increase in the share of the population in paid employment," he said.
"Both of these would be positive for real income growth. Australia's fundamentals also remain sound. We have a tremendous base of natural resources, a talented, diverse and growing workforce, a stable political and legal system, a highly regarded university system, and we are well placed to benefit from the increasing demand for services from Asia."
While the politicians preach about innovation and the business and ideological lobbies demand one reform or another, we tend to underestimate our ability to just get on with the job and do it anyway.
Exporters have to, making use of those fundamental strengths Lowe outlined. And if our exporters aren't innovative, they become nothing more than a commodity flogger, left in the dust fighting for the lowest price.
It takes time for the fundamentals to work when given a chance.
The unheralded good news – the stuff that doesn't make good clickbait - is that it's steadily happening.