Victoria optimistic about attracting new investment

The Victorian Government is currently examining opportunities for investment in the chemical, plastics and rubber industries. Mr Richard Fowler, an industry specialist with Business Victoria, described the details of a study being undertaken for the state government by Stanford Research Institute.

The study looks at opportunities for investment attraction within Victoria. The study has so far incorporated the views of all the large companies operating in Victoria and a large number of the middle-sized companies.

'We're going to have to tackle one or two of the big ticket import areas if we're going to succeed in addressing the trade deficit in these industries,' said Mr Fowler.

The study includes an analysis of chemical industry imports to Australia, 'Many of the items are not currently produced in Australia,' he said, 'but it is felt they may be able to be produced at a competitive cost. In the year surveyed, there were approximately $80 million worth of plastic bags imported into Australia; imported articles of plastic for domestic use totalled some $248 million and there were many other examples of imports of single items worth many millions of dollars.

'We're not getting the investments in Australia,' was his comment on a slide that showed the value of projects under way in the chemicals industry for Australia at a fraction of that currently planned for Asia. 'We think we can achieve a significant turnaround in this area.'

Some of the areas he reported from the study included comparisons of infrastructure, labour, capital, access to markets and the corporate structure. He reported that the study results so far raised the question of the potential for rationalisation and acquisition by manufacturers to gain economies of scale.

'A rating of corporate taxation showed that, of countries in the region, Australia had a tax scale similar to many.'

He said that, despite somewhat higher wage and salary costs in Australia, an overall ranking of 'net labour costs', after taking into account quality, skills and turnover, ranked Australia ahead of most Asian countries and second only to India.

Measures that Business Victoria takes to woo potential investors include facilitation, to ensure that the path to investment is rapid and smooth. Business Victoria has an expert and extensive team operating in this area.

He said progress on the chemical industry study is due to be reported to meetings of company participants over the next few weeks. The Victorian Government clearly wants the companies currently operating in the state to feel that they have had a major input into the final outcome.