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Services trade crucial to Australian economy

Minister for Trade, Tourism and Investment The Hon Steven Ciobo MP

One of the driving forces that will underwrite the continuation of Australia's record-breaking 26-year run of economic growth is the rise of services exports.

Building the architecture to facilitate growth in services exports is a key component of the Turnbull Government's economic plan for the transition of our economy to the post-mining boom era.

The growth of global value chains in services and integration of services trade into the global economy is poised today where the growth of manufactured goods sat a generation ago.

Services are at the heart of our economy. In all, services account for three quarters of the Australian economy and, importantly, provide more than four out of five Australian jobs.

However just under a quarter of our exports are services exports, so the scope for growth is huge.

Services exports were up nine per cent last year to $71 billion.

Tourism and education led Australia's services trade with the world, followed by business services, transport and then business travel services.

Backpacker standing in airport

In 2016, goods and services exports rose eight per cent in real terms, and net exports contributed over half of our real economic growth of 2.4 per cent.

The star performer was Australia's services sector. After hitting an all-time record in March of $18.5 billion, the services sector is forecast to grow at least four per cent year on year over the next two financial years. The sector is proving itself to be a reliable driver of export and economic growth.

This edition of business envoy provides information on our booming services sectors including tourism, health and ageing, education, professional, mining and financial services.

The Turnbull Government is determined to see the growth continue. That is why we are pursuing an ambitious trade agenda to support the diversification and growth of our economy.

Enhancing services trade is a key component of that agenda.

Our top trade priority for 2017 is concluding an ambitious Indonesia-Australia Comprehensive Economic Partnership Agreement. We continue to push for high-level outcomes from the Regional Comprehensive Economic Partnership negotiations, a regional free trade agreement involving 16 countries. We have updated our free trade agreement with Singapore, have recently launched negotiations with Hong Kong, the Pacific Alliance countries (Mexico, Colombia, Chile and Peru) and Peru, and continue to work towards commencing negotiations with the EU and the UK.

We are also hoping to re-engage as soon as possible on the Trade in Services Agreement negotiations involving 50 countries. You can read more about these trade negotiations on p21-23.

These negotiations will create new markets for our services suppliers, farmers, and manufacturers enabling them to grow and employ more people.

Australia has long recognised that with a small population, we must look to external markets to fuel growth at home and maintain the high standards of living we have come to enjoy and expect.

The Turnbull Government is committed to policies that support economic growth and create new Australian jobs.

Last Updated: 8 August 2017
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