Australian exporters should be prepared to take advantage of the falling dollar, but further decline is needed before any real ground can be made, Australian Institute of Export executive director Ian Murray says.
Murray says the lower dollar is encouraging for exporters and hopes it continues to drop over the coming months below the recent 13-month low.
“We’ve demonstrated at that level we’re pretty competitive. That’s the most important thing,” he says.
But Murray also emphasises exporters shouldn’t become too comfortable with the relatively sudden drop, as short-term decline isn’t stable enough to warrant long-term growth.
“Changes on currency are more a long term than a short term thing. I don’t think sudden shifts will bring sudden wealth to somebody. It needs to be consistently low,” he says.
“I’d like to see it around 75 cents, then I think exporters would really be able to capitalise on it.”
But Austrade chief economist and SmartCompany blogger Tim Harcourt says there isn’t necessarily a “magic figure” exporters can depend on, and fluctuation in the dollar is to be expected.
“Whenever there’s been a big dip in the Aussie dollar, Australian exporters have basically been able to get a beachhead,” he says. “They do so because you can suddenly become very competitive. You can suddenly get some new customers.
“But they do so on the assumption it’s going to go up again. It’s a bit like when interest rates are low; you can lock in a loan, but it isn’t always going to be that way,” he says.
“Ultimately, how successful you’re going to be is not on the dollar, it’s the quality of your services.”
Harcourt also argues a higher dollar isn’t necessarily a death warrant for exporters, pointing out over 40% of exporters in Australia also import goods.
“When the dollar was very high, the miners and IT companies who imported equipment found it pretty handy because they could buy things at an advantage. A lot of them got a cost benefit.
“The news often broadcasts the low dollar as being bad for importers and good for exporters, but it’s not often noticed they’re often actually the same people.”
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