Asian tourists in Melbourne. Photo: Eddie JimFederal politics: full coverage Ken Henry’s speech on prosperity
Victoria’s economic strengths will sweep it ahead in the next 20 years, positioning it to capture the demand from Asia’s middle class for everything from better food to better education and better returns on its savings, a report by consultancy firm Deloitte forecasts.
The report, Positioning Australia for Prosperity? Catching the Next Wave, predicts that six ”super-sectors” will grow faster than the rest of the global economy. It says Australia generally, and Victoria specifically, has unique advantages in almost all of them.
”The next wave of Australia’s prosperity will come from sectors that are much more evenly distributed across Australia than the minerals are,” co-author Chris Richardson told Fairfax Media. ”Asia’s demands will widen out from iron ore and coal to a bunch of other things.
”The times will suit Victoria. It is superbly positioned to capitalise on Australia’s next boom.”
The Deloitte report forecasts that around the world, six sectors will outpace other industries in growth over the next 20 years: gas, tourism, agriculture, health, international education and wealth management.
It assumes that Australia’s world-class health system will remain focused on serving Australians, but sees the other five sectors as having strong export potential.
Crucially, the report assumes that in the long term, the Australian dollar will settle 15 per cent less than its present level, at around US80¢. Apart from its plunge during the global financial crisis, that is lower than the currency has been for some years.
The report concedes that most of these industries depend on the dollar being at a competitive level. Most have gone backwards in recent years, as the dollar has averaged more than $US1. Agriculture has been shrinking relative to the rest of the economy for a century.
But Deloittes forecast that growing population and wealth in Asia’s fast-growing economies will drive a new demand for high-protein foods such as meat, dairy products, fruit and vegetables.
Victoria exports more food than any state, and Deloitte argues that the switch in Asian demand will be ”tailor-made for Victoria’s farmers, with their great strengths in dairy and horticulture”.
It ignores CSIRO warnings that climate change will reduce the productivity of the Murray-Darling basin, and assumes there is water to spare for Victoria to move into intensive horticulture to meet Asia’s demands.
International education became Victoria’s biggest export industry in the last wave, and while it has been severely dented since 2009 by the high dollar, poor quality courses and the murder of an Indian student, Deloittes forecasts that the numbers of ”globally mobile students” will grow by 7 per cent a year, creating big growth opportunities.
The report says that Australia’s natural attractions and reputation as a safe, democratic country will make it attractive to the growing numbers of Asian tourists.
It says there is potential for Australia’s wealth management firms to export their services, to manage the savings of the swelling numbers of Chinese and Japanese retirees. The funds industry is based in Melbourne.
The original release of this article first appeared on the website of Hangzhou Night Net.