Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 371

We’re number 106, and that’s not good

According to the World Bank’s 2020 Trading Across Borders report, Australia now ranks 106th in trade system productivity, having fallen precipitously from 27th position in 2010. This sounds dramatic, and it is, but why is this global ranking important for Australians?

Falling trade competitiveness

The World Bank has a Doing Business Score that, in the case of trade, measures the competitiveness of the regulatory performance of countries based on border compliance, documentary compliance and domestic transport costs. Organisations, such as the Australian Chamber of Commerce and Industry, believe the cause of Australia’s decline in competitiveness is quite simply that globally countries have digitalised their trade systems whereas Australia has not, and so our compliance costs are uncompetitive.

Trading across Borders in Australia and comparator economies – Ranking and Score

Source: The World Bank

Some readers may remember Australia’s trade battles were traditionally fought on the waterfront, coming to a climax in the 1998 Maritime Union of Australia versus Patrick Corporation stoush. This time the issue isn’t waterfront productivity but rather digital productivity.

Best practices in trade productivity today are supported by what is referred to as a Single Window approach, which is a system that allows traders to file standard information and documents through a single-entry point to fulfill all import, export and transit-related regulatory requirements. Importantly, these processes are digital.

Countries have developed web-based systems allowing traders to submit documents and pay duties online. These systems deliver long-term benefits through saving time and money while streamlining procedures. Further benefits from web-based systems are that they can help governments combat fraud and money-laundering, track statistical information on foreign trade transactions, and share information with key support players in trade such as banks, insurers and logistics companies. The benefits of a Single Window system therefore go beyond trade, to national security. The challenge for all countries wishing to secure these Single Window benefits is the ability to migrate their regulatory framework from paper to digital.

Further example of Australian red tape

The ANZ Bank estimates that a company which processes around 1,000 export documents a year would save close to $250,000 by moving to a digital trade solution. And like many government red tape related issues small- to medium-sized businesses are likely to gain the most from the establishment of a successful Australian Single Window trade system.

This is the state of play today, but the goal posts are moving, and quickly. While in Hong Kong in 2018 a large Australian Bank introduced me to the Hong Kong Monetary Authority (HKMA), the equivalent of our Reserve Bank. The HKMA was leading what they called their eTrade Connect initiative, largely funded by local banks, meant to move Hong Kong’s trade system from digital to a Blockchain enabled system. Singapore is doing the same, and a few months after returning from Hong Kong I met with a Japanese group with the same mission.

Banks globally are particularly interested in Blockchain-enabled trade finance systems as Blockchain technology provides far more security and transactions occur almost instantly. Trade credit providers are exposed to fraudulent trade transactions, and during the GFC trade finance professionals virtually lived at their offices as companies struggled to understand the financial credibility of the counterparties they were trading with. Blockchain-based trade finance significantly reduces those risks. And importantly the Blockchain technology being deployed is not particularly difficult to incorporate into trading systems, the hard part is getting the participants onside.

The World Bank is supporting Blockchain-enabled trade systems as they believe it will rip out further costs in global trade systems. And the World Bank also believes Blockchain-enabled trade systems will support micro exporters operating in developing countries gain access to inexpensive trade systems, including trade finance, which is often the difference between successful growth and merely surviving.

Left behind on trade competitiveness

Upon my return from Hong Kong (when Australia was ranked 95th) I spoke with government agencies such as Treasury, DFAT and ASIC, as well as private sector organisations with a stake in Australia’s trade competitiveness, as to who was responsible for improving our trade regulatory productivity. I was advised that The Department of Home Affairs was charged with delivering Australia’s Single Window; however, Home Affairs had no information on their website (and still do not) in respect to the Single Window initiative, and calls I made to Home Affairs on this issue were not returned.

As a country, we have known about our weaknesses in trade processes for many years, as the Australian government has been involved in stop-start initiatives to deliver a digital trade system since at least 2009 without success. Now the leaders of the trade pack are taking the leap to the next technology platform, Blockchain, to enhance their trade competitiveness.

As a trading nation, Australia cannot afford a ranking of 106, and the costs associated with it, in an area so important to our economic well-being. And a government looking for any opportunity to kick start a COVID-weary economy would do well to finally bring our trade systems into the 21st century.


Kevin Cryan is a technology and services investments specialist and Managing Director of Scarborough Partners. He was previously Senior Investment Specialist for Services and Technology at Austrade after spending 16 years at the CSIRO.


August 22, 2020

I’m glad this article has been written. It needs a wider audience than just firstlinks readers. Digitisation makes sense. There are just so many things our government could ( and should ) be doing. There doesn’t seem to be the political will to do anything much. Covid showed us how quickly decisions could be made and implemented. This Parliament barely sits. The Government aren’t being accountable.

Gerard Cleveland
August 20, 2020

Cryan asks some important questions. Why HAS Australia allowed this trade impediment to continue? Right now- with massive unemployment and a ravaged economy - maybe this is the best time to address the problem? Perhaps our so-called business-focused government can fix this mess by employing some of the thousands currently looking for work in the sector.

Interesting article but what arises from the concerns raised by this author? Does firstlinks have anyone who can ask questions of the relevant Ministers so that we are not even more disadvantaged when we eventually return to our (mediocre) pre Covid trading patterns.

Martha Langford
August 20, 2020

With the significant financial support State and Commonwealth Governments provide to help Australian exporters, and the ongoing encouragement from our politicians to embrace innovation, one would expect that providing innovative digital solutions to support our exporters would be higher priority.

August 20, 2020

Who knew this? Who thought we were one of the world's great traders? So we can't even get the paperwork (electronicwork?) right?


Leave a Comment:



China’s new model is a plan for a hostile world

Blockchain revolutionises the cyberworld

Trump’s tariff proposals benefit global infrastructure


Most viewed in recent weeks

Unexpected results in our retirement income survey

Who knew? With some surprise results, the Government is on unexpected firm ground in asking people to draw on all their assets in retirement, although the comments show what feisty and informed readers we have.

10 reasons wealthy homeowners shouldn't receive welfare

The RBA Governor says rising house prices are due to "the design of our taxation and social security systems". The OECD says "the prolonged boom in house prices has inflated the wealth of many pensioners without impacting their pension eligibility." What's your view?

Three all-time best tables for every adviser and investor

It's a remarkable statistic. In any year since 1875, if you had invested in the Australian stock index, turned away and come back eight years later, your average return would be 120% with no negative periods.

The looming excess of housing and why prices will fall

Never stand between Australian households and an uncapped government programme with $3 billion in ‘free money’ to build or renovate their homes. But excess supply is coming with an absence of net migration.

Five stocks that have worked well in our portfolios

Picking macro trends is difficult. What may seem logical and compelling one minute may completely change a few months later. There are better rewards from focussing on identifying the best companies at good prices.

Six COVID opportunist stocks prospering in adversity

Some high-quality companies have emerged even stronger since the onset of COVID and are well placed for outperformance. We call these the ‘COVID Opportunists’ as they are now dominating their specific sectors.

Latest Updates


10 reasons wealthy homeowners shouldn't receive welfare

The RBA Governor says rising house prices are due to "the design of our taxation and social security systems". The OECD says "the prolonged boom in house prices has inflated the wealth of many pensioners without impacting their pension eligibility." What's your view?


Sean Fenton on marching to your own investment tune

Is it more difficult to find stocks to short in a rising market? What impact has central bank dominance had over stock selection? How do you combine income and growth in a portfolio? Where are the opportunities?


D’oh! DDO rules turn some funds into a punching bag

The Design and Distribution Obligations (DDO) come into effect in two weeks. They will change the way banks promote products, force some small funds to close to new members and push issues into the listed space.


Dividends, disruption and star performers in FY21 wrap

Company results in FY21 were generally good with some standout results from those thriving in tough conditions. We highlight the companies that delivered some of the best results and our future  expectations.

Fixed interest

Coles no longer happy with the status quo

It used to be Down, Down for prices but the new status quo is Down Down for emissions. Until now, the realm of ESG has been mainly fund managers as 'responsible investors', but companies are now pushing credentials.

Investment strategies

Seven factors driving growth in Managed Accounts

As Managed Accounts surge through $100 billion for the first time, the line between retail, wholesale and institutional capabilities and portfolios continues to blur. Lower costs help with best interest duties.


Reader Survey: home values in age pension asset test

Read our article on the family home in the age pension test, with the RBA Governor putting the onus on social security to address house prices and the OECD calling out wealthy pensioners. What is your view?



© 2021 Morningstar, Inc. All rights reserved.

The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.

Website Development by Master Publisher.