Could go on forever about outsourcing to Manila etc but won't. Either way staff are about 30 - 50% of local costs (am a kiwi so working on NZ experiences) so from an Aust perspective it would be even better for you guys.
The issues are that they will move at a moments notice to the next outsourcer who is offering a few bucks more a year. Wage inflation running at 10% a year compared to 2 - 3% in your own market means that the profit margin starts to disappear after 3 - 4 years, but by then you are looking at the next developing market anyway - eventually cambodia, thailand, vietnam or somebody else will take on the outsourcing mantra once their youth have a high enough education level...
Then you need to work out how time your management team spend flying up there all the time to oversee it...
It can work out wonderfully if you keep it in perspective
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