The Radical Shift Hitting Aussie Exports

With our wide-open space, clean air and natural wonders, Australia is an exporter’s dream.

It’s no surprise that our natural resources are coveted worldwide. With demand in South East Asia growing every year, coal, iron ore, aluminium and gold currently comprise over 60% of total exports.

Australia is also well known for quality. When it comes to food, education and professional services, our products are known for being world-class.

In fact, ‘education related travel services’ — international students studying in Australia — is our third most exported commodity. Bringing in upwards of AU$21 billion to our economy in 2016.

Number eight on the list is Australian beef. Aussie beef is a prestigious and sought-after product, particularly in countries where food quality remains a concern. It brings in billions to our economy and provides a major boost to the agriculture industry.

When you add wheat, wine and wool to the mix, there’s no doubt that we have a very healthy export industry that is essential to economic growth.

However, the export industry in Australia also has a dark side…

Live exports, which were temporarily suspended in 2011 due to revelations about inhumane slaughter practices in Indonesia, remain a hot topic in Australia.

Despite repeated reports of extreme animal cruelty and horrific travel deaths, the allure of profit, as usual, has prevailed.

After the five-week suspension, Australia resumed exporting live animals to countries that have little to no animal rights protection. Choosing to disregard the evidence and the bans that currently exist in New Zealand and the UK.

And as they’re a major economic driver, live exports are actually increasing. 30,000 cattle have already been exported from Darwin this year. Which is double the figure for January 2017.

The prioritising of commerce over ethics seems to colour much of our trade decisions.

As I’m sure you’ve heard, the Turnbull government recently pledged to increase defence exports by AU$1 billion.

If successful, this move would put us in the top 10 weapon exporting countries within the next decade, up from 20th place.

The proposed aim is to increase local manufacturing jobs and export more products to the Middle East, the US and the Indo-Pacific. As well as doubling defence export earnings to $3 billion.

However, the Greens and various aid groups have accused the plan of trying to profit from war, while contributing to the global arms race.

As Marc Purcell from the Australian Council for International Development put it:

We should not be getting into the game of marketing weapons which kill, maim, and bring great sorrow and destruction to communities around the world.

The future of Australian export

Clearly, what we choose to export is fraught with debate. Especially when there are ethical questions involved.

As such, choosing what exported goods to invest in can be a tricky process. Both in terms of profitability and sustainability. However, there are still products that you can invest in that reduce, rather than exacerbate, suffering and warfare.

With the government on the verge of passing the necessary legislation, medicinal marijuana exports could soon land a place in our top 10 most exported commodities.

When used medicinally, marijuana has been proven to greatly ease the symptoms of a myriad of major illnesses — in both children and adults.

And as experts are predicting there is a shortage about to hit the global market, now could be the perfect time to invest in this bourgeoning industry and the Aussie companies leading the shift.

Small-cap investing expert Sam Volkering has just released his research report on which Aussie stocks could turn into global leaders in this space. To get your hands on it, click here.

This week in Markets & Money:

Wage growth in Australia has remained stagnant. Even though 400,000 jobs were added in 2017, there is yet to be a meaningful increase in wages. In fact, they’ve been in a downtrend for the last few years. On Monday, Shae noted that the enterprise bargaining agreement supported by industrial unions is to blame. This agreement means that a large number of Australians are allocated the same wage increase every three years. But as the increases keep getting smaller, we shouldn’t expect wage growth to expand anytime soon.

To read the full story, click here.

On Tuesday, Shae questioned whether reducing the corporate tax rate would result in increased wages for workers. A proposal for the 5% cut is going through the Senate this week, which will likely be blocked by Labor. And although the outcome of wage growth remains an unknown, there’s no doubt the reduction would help businesses thrive overall. That said, there are a few companies currently holding the government to ransom…

More on this story here.

On Wednesday, Jason urged investors to forget about cryptocurrencies and realise the potential gains still sitting in the stock market. After all the exchange hacks and price crashes, in Jason’s view, it’s a wonder anyone still thinks cryptos are a sound investment. And as the stock market correction looks like it’s over, now could be the time to dive back into the market head first…

To read the full story, click here.

On Thursday, Shae tackled the issue of Myer and why it’s edging towards failure. Myer’s share price has declined a whopping 58% in the last three years. And the company’s overall value has also dropped by half. It’s no wonder that Myer’s CEO has just stepped down. But Solomon Lew, a major Myer investor and vocal critic of the brand, may have some plans to save the business. Shae thinks if Myer continues in a downtrend, he will likely unveil his plans soon.

For more details on this story, click here.

On Friday, Shae looked at a new trend in real estate. Just when you thought the capital city housing bubble couldn’t stretch any further, developers have found a way to push it just a little more. This latest move is inspired by some of the most populous cities in the world. And it could be just the thing to drive urban Australian real estate to new heights. Not to mention the profits of some of the largest real estate developers trading on the ASX…

To read the full story, click here.

Until next week,

Katie Johnson,
Editor, Markets & Money

Katherine Johnson, usually going by just ‘Katie’, is a member of Port Phillip Publishing’s editorial team, as well as the Editor of the Saturday edition of Markets & Money. Katie works with all of your editors to maintain the quality of their research and analysis. In her Saturday Markets & Money articles she specialises in cryptocurrency and technology stories, and brings you a recap of the week from your other Markets and Money editors.

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