Speaking from experience the answer to that question is yes and no.
I raced my CA18DET in hillclimbs and sprint events when i was in QLD and i was very pleased with the results, and i used to drive it to and from events, but i must stress(as Bert mentioned)you have to spend HEAPS on you set-up to be competive but if you just want to go out and have some fun and not be too serious it's a good idea for hillclimbs and club sprint events. You have to remeber that because it is a 1.8lt turbo you have to add 1.7 to the 1.8 so you will be up against all the V8's and big horsepower rotories.

Minimum requirments how ever,
- Good brakes, ventilated rotors and decent calipers to suit.
-Decent race prepared suspension to be able to handle race conditions, fully adjustable helps.
-LSD differential R31 skyline or commodore or ford cut and shortened to suit, I used 1200 ute diff that was welded and it broke a few times!
-Roll cage racing seat and harness.
- good re-built low Km's engine with good turbo, intercooler and a decent tuning.
- A steady hand and head!!!

If you want to get a competive set up, you want get much change from $20 000, but that if you want to be a serious racer, just for a bit of fun $10 000- $15 000 depends on how serious you want to go, Good luck which ever way you go!

I want to go out there and a fun but once i started spending on it I want to makes sure the car is capable of going the next step further.

I have already spent close to 12k on my ute and am now realising that i will be limited to what i can do and where i can race not that i regret any of it. I could keep spending on it but i don't think it is worth it. time to upgrade to a more suitable car.

thanks for all you advice i now have a few decisions to make.

you could always stay with the A series & turbo charge that, an A12 will be under the 2 litre limit, & an A15 will put you into 2-3 litre.
the 1200 coupe running with a turbo A12 in the NSW hillclimbs is quite competitive in his class.you've probably got the old A12 still floating around, so you don't have to buy another engine. & it'll bolt straight in without cutting up the engine crossmember. Just an alternative you might not have considered.

and if you think an a12 turbo isnt capable of producing reasonable power have a look at topgears turbo a12 he sat down and thought it out on what he was going to do and the lil a12 produced 96kw atw