Trade and Aid

Australian Imports

Despite our strong earnings from exports in recent years, Australia continues to import more goods and services than we are able to export.  This has important consequences for the Australian economy, and so you should gain some idea of the types of things we are importing.

Once again, we can look to the Department of Foreign Affairs and Trade for an accurate description of our trading performance.  In 2005/06, our top five imports were listed as follows:

Major Australian Imports 2005-06 (AUD $ million)

Crude Petroleum

$12,466

Passenger Motor Vehicles

$11,997

Refined Petroleum

$8,316

Computers

$6,081

Medicaments (including Veterinary)

$5,944


It is here that we can start to see one of the long standing weaknesses of the Australian economy.  Crude petroleum is listed as both an import and an export, but refined petroleum is only listed in the top five imports.  Refining is the process of taking the crude oil and turning it into something that we can use.  The refining process results in many different fuels, including the petrol that we use in cars.

One of the more unusual products that Australia imports!The process of taking a raw material and changing it in some way so that it can be sold for a higher price is called value adding.  Traditionally, the Australian economy has not been good at value adding.  We export crude oil, but we import refined petroleum.  We export iron ore, and then we import steel (a product which is made from iron ore).  We export wool, and we import clothing.

The Australian economy could earn even more money from our exports if we were able to complete the value adding process here.  The problem is that at the moment our wages are too high by world standards for this to be a viable option; it is actually cheaper to send the raw materials overseas, and then buy back the finished product.

You can also see that Australia needs to import certain things in order to maintain our standard of living.  The development of life-saving drugs in other countries is important for the ongoing health of people in this country.  Australia maintains the strictest testing procedures in the world, and therefore importing these drugs is a safe, cost effective way of ensuring that they are available for use by people in this country.