Our missionaries sans borders, selling it like it is

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This was published 12 years ago

Our missionaries sans borders, selling it like it is

By Farrah Tomazin and Tom Hyland

Victorian representatives fly the flag for the state all over the world, but it's not all just wining and dining.

IF 14 international offices for the state of Victoria seem plenty, there are more on the way.

Looking for trade in all the right places.

Looking for trade in all the right places.

Next month, Premier Ted Baillieu is heading to India, leading what the government says is the biggest trade mission there in Australia's history, with 200 company representatives going with him.

Mr Baillieu will open a Victorian office in Mumbai, making it 15. In his first overseas trip as Premier last year, Mr Baillieu opened an office in Beijing.

Michael Kapel's predecessor Victor Perton.

Michael Kapel's predecessor Victor Perton.

And in April, when the Premier's chief of staff, Michael Kapel, starts his new job as Victoria's commissioner in the Americas - based in San Francisco - a key focus will be on South America, where another office may eventually open. With it will come opportunities in renewable energy, education and tourism.

Victoria almost matches Queensland for the most number of foreign offices, with eight key outposts headed by an expatriate - and a range of smaller ones run by local staff. It's a crowded field. New South Wales has four (with two more on the way), Western Australia 10 and South Australia eight.

While nobody denies the need to aggressively push for trade opportunities in Victoria, there are those who question the duplication and competition between the states.

The federal government's trade body, Austrade, is already spruiking trade and investment, and some question the lack of detailed information about what they do and how much they cost.

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Their role is to sell the state, to boost trade and investment links and find emerging markets.

The job involves everything from attending an expo, hosting a trade delegation or wining and dining business leaders.

''When it boils down to it, you're the chief salesman for the state of Victoria,'' says Victor Perton, Mr Kapel's predecessor, who is returning to Melbourne after three years covering North and South America.

''One of my most pleasing moments was catching an elevator down 12 floors and talking to the bloke next to me in the lift, he says. ''Nine months later I was presenting to his board on the logistics of setting up an office in Melbourne.'' Alan Oxley, an international trade consultant and former senior diplomat, believes the states should focus on attracting investment, leaving trade promotion to Austrade, the $200 million Commonwealth agency that has offices in 102 cities, and ''a much longer track record, connections and knowledge''.

Tim Harcourt, Austrade's former chief economist, is more positive about what the states are doing - but he stresses that they perform best when their overseas offices work under the umbrella of the federal body, sharing facilities to avoid duplication and cut costs. (In some places, South Australia and Queensland share office space with Austrade.)

He also thinks there is the risk of the states under-cutting one another in competition for foreign investment. But in the case of exports, markets in China, India and Latin America are so big, ''I actually think the more the merrier'', says Mr Harcourt, now a professor of international business at the University of New South Wales.

Victoria needs to boost exports - the state recorded the lowest growth in exports of all the states last year - 3.9 per cent compared with the national growth of 17.3 per cent. The biggest hit came with a 20 per cent drop in car exports - a drop that could continue as the Australian dollar surges.

Yet putting a figure on how much trade and investment is won by overseas offices is complicated. State government figures suggest that in 2010-11, the Department of Innovation, which runs the offices, "facilitated" more than $2.7 billion in investment and infrastructure projects. How much is a direct result of our overseas offices is unclear. Much of the work commissioners do is in promotion, creating a profile and setting up networks.

For instance, the government credited its Europe office in Frankfurt with having ''secured'' the entry of the Spanish retailer Zara into the Australian market.

Yet Zara's first entry into Australia was in Sydney, part of an ambitious worldwide strategy by a company with 5000 stores in 77 countries. (The City of Melbourne also claimed credit for Zara's arrival in the CBD.)

The government also credits its US office for helping a decision by the technology company Juniper Networks to expand in Melbourne, and credits the Kuala Lumpur office for assisting in a $60 million investment by the almond growers Olam Orchids Australia. But as Victorian Tourism Minister Louise Asher admits: "We use the word 'facilitate' because nothing is ever absolute. No one person ever clinches a deal."

The risk of duplication is also a problem as states and the Commonwealth compete for a slice of global markets. In Shanghai, Victoria, NSW, Queensland, Western Australia and South Australia all have offices.

This year's Victorian budget allocated $11.5 million to run the state's overseas office network.

Salaries, rent and accommodation make up about three-quarters of the costs, and the rest goes into travel and general operating expenditure.

But the government did not break down what each office cost, and data revealing the true extent of expenses must usually be sought under freedom of information laws.

Commissioners also get a base salary ranging between $130,000 and $190,000, on top of moving costs, school fees if they have children, and a range of other perks (which the government refused to disclose).

They can also rack up hefty taxpayer-funded bills. Previous expenses claimed by the London office included a $9400 limousine bill by the then treasurer, John Brumby, and a $3700 lunch in Paris for then attorney-general Rob Hulls.

More recently, it was reported that the catering bill at a 2010 biotechnology conference in Chicago cost taxpayers more than $20,000, while officials at the government's Bangalore office claimed a luncheon worth $13,600 at a swanky Indian hotel.

But some argue that what is spent is outweighed by what we gain. ''These offices have been associated with direct investment into Victoria worth hundreds of millions, possibly billions of dollars, and have opened doors for Victorian companies to access emerging markets,'' says the Labor Party's industry spokesman, Tim Holding, a former export minister in the Bracks government.

A former London agent-general, David Buckingham, agrees.

"Australia is a long way from European decision-makers,'' he says. ''You have to be there to be part of the game."

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