Australia is a democratic nation that is considered one of the world’s most stable economies with a sound political system and a low risk business environment (NSW govt). Its government policy & regulations are transparent & utilizes accommodating financial practices. Australia’s legal system is a mix of statute & common law where both domestic as well as foreign organisations face the same stand before the law.
Why Doing Business in Australia?
Australia’s cultural blend territory and enormous prospect have been shaped by a vast array of geographical diversity, varied inhabitants and multiculturalism. Its strong economy surrounding advanced agriculture and manufacturing industries, a multilingual and highly skillful workforce as well as low operating costs have made Australia one of the most prevailing and appealing nations in the world.
It is crucial to fully comprehend the fundamental notions of Australia’s culture and business protocol, in order to truly grasp the density of this market economy and effectively gain from doing business there. Communicaid’s ‘Doing Business in Australia’ cultural awareness program is perfect for groups and individuals who desire to build strong associations and business connections with Australian social groups, allies and customers. This course is designed to assist you in discovering how to make the most of the competitive advantage of doing business there via a mixture of profound environment data and applied practical guidelines and business solutions.
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The food industry in Australia consists of a large variety of products. Australia has an assortment of climates and soil sorts, although the weather tends to be mainly dry. These comprise high-rainfall coastal areas, northern tropical districts, dry and semi-dry climates, the majority of which are utilized for food harvest. Pooled with radical technology, this range makes Australia a steadfast long-term provider to global markets.
Increase in the Australian profit foodservice industry has been fairly stable in recent years, with even the hard-hitting macroeconomic conditions in 2008-2009 failing to have much of an impact. This suggests that there is yet plenty of room to extend business for newcomers as well as already established ventures. Entry to the profit foodservice segment normally entails little funds, and self-governing foodservice outlets can thrive as sole proprietor setups.
The fast food industry in Australia has encountered a dynamic growth over the last decade as residents are making dining-out a way of life. During 2007, around 1.64 billion takeaways and meals were served by fast food chains and autonomous outlets overall, representing 44% of all meals served in the business foodservice division. There are about 17,000 fast food outlets throughout Australia – accounting for 28% of all commercial foodservice outlets.
With the effects of international trends as well as more exclusively-developed Australian dining out fondness, the fast food industry has increasingly evolved over the years within the market. The amplified recognition of chain outlets at the cost of self-governing fast food operators appear to hold up whereas there are shifts in the regard of assorted fast food substitutes.
Political overview
The nation has a strong democratic background, with a government elected by the people. Political and governmental authority is much decentralized in Australia, with power being clearly separated among the states. As the Australian Republican association slowly acquires national significance, the wish to be a republic is gradually increasing in the country.
Economic analysis
Australia recorded a vigorous yearly average GDP growth rate of approximately 2.9% during 2002-09. The economy has been encountering a downturn since 2008, and noted a lower GDP growth rate of 0.8% in 2009. Nonetheless, its accomplishment is better than a lot of the other highly developed economies, largely because the Australian government’s funds are in a better position, and its exports are dominated by commodities. The Australian regime has undertaken diverse schemes to ensure that there is overall progress in the country, which may alter the economy. Such constructive strategies have presented Australia with a solid basis on which it can convert itself into a digital economy, improving development in all segments of the market.
Logistics of air and water as well as food service and trade within the industry are the most essential sectors. Improved expenditure by Australians in their own realm propelled domestic tourism to $58 billion in 2007-08, a boost of 6.8% over the preceding year. Its input to GDP continues to be significant, even though the economic recession has negatively affected the industry to a limited degree.
Future prospects
Recovering economy
The Australian economy managed to survive the economic crisis, in spite of the global economic repression. While economic growth was cut down from around 2.3% in 2008 to around 0.8% in 2009, the nation remained in optimistic conditions compared to numerous other developed countries that went into recession with negative growth rates. It was anticipated that the country is expected to record a growth rate of 2.6% by the end of 2010, and reach up to 3.6% by 2012.
Future risks
Renewed inflationary pressures
Australia’s swift economic revival has resulted in improved inflationary strains in the economy. The quarterly consumer price index (CPI) published in April 2010 illustrated prices increased by a larger than projected 0.9%, elevating the annual rate to 2.9%. This was more than the Reserve Bank of Australia’s (RBA) 2-3% inflation objective band. It is likely that in the short term, the prices will further increase and lift up the inflationary force on the economy. Inflationary strain could probably make the exports unfeasible, and further broaden the existing account gap in the near prospect.
Protectionism
Free trade agreements
The concept of having an FTA between Australia and China was first suggested in 2005, and discussions in April 2008 appear to have been productive. Under the current FTA, the Australian administration is expecting China to initiate adjusted tariff offers on all commodities, including agricultural supplies. During their most recent round of free-trade negotiations, the governments discussed agricultural goods affected by tariff-rate quotas (cotton, wheat, rice, sugar, wool and corn). In addition, the Australian government has also highlighted that its producers will not pose a risk to China’s farmers.
In April 2008, the Australian government also signed a pact with South Korea in for a long-term free-trade accord, to be effective until 2020. The Australia-Korea FTA could enhance Australia’s GDP by up to $22.7 billion and South Korea’s by up to $29.6 billion over the period 2007-20, as indicated by the Australian administration. With these reciprocally valuable agreements in place, Australia is set to increase its external trade with both countries. Early in May 2010, India and Australia finalized their mutual feasibility study for a bilateral free trade agreement, which demonstrated an increase of around $34 billion to the GDP of both countries for the next 20 years. This is a positive indication for a potential prospect agreement towards an FTA.
Social analysis
Overview
Compared to other countries such as the US, Australia boasts a much better social movement. In spite of itsfinehealthcare system, the nationconfronts a frail social security structure and skilled work burdencausingexcessivelevels of strain. Anotherissue that is currentlygrowing as a concern is the decline in the labor force versus the aging population. The country’s flourishing education sector may also sufferdue toswellingcases of assaults on Indian pupils, who comprised a substantial 18.7% of overall international students in 2008.(I think u should remove this as its an exaggerated statement)
Table 5: Analysis of Australia’s social
With opportunitiesof income based promotions more frequent compared to otherplaces,such as the US,Australia bidsadvantageous prospects for social agility.Suchdevelopedsocial movement is enticingto various foreign residents to migrate to Australia. Improving avenues for social mobility bode well for the country.
Tele-education is gaining increasing significancein order to assist healthcare professionals in Australia’s secluded zones. Furthermore, businesses and academies are embracing e-learning resolutionsin their attempts to cut downexpensesas well asdeliverschooling and training to more people. In 2008, $1 billion was capitalized by the Australian administration in e-learning as well as e-health, to further develop the meansall over the commonwealth.
Current challenges
Social security system
Originally, the social security scheme was proposed to perform as protectionthrough short periods of unemployment. It functioned well in the 1950s and 1960s;however, since the 1970s, the upsurge in joblessness has made more apparent the scheme’s cost. Besides the monetaryoutlays, the indirect costs relating tograntingpeople funds in order tolook for employment and the families that are jobless are becoming quiteexpensive. Long-term redundancy and the risingtrendof unemployed families (sometimes two or three generations of one householdbeing jobless at a time) suggest the sort of difficultiesmet by the system. The most challengingaspectsof the Australian welfare structure are its density and the fringe tax rates applied to people who leave the welfare prop and join the workforce.
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Future prospects
Incentives to increase employment opportunities
The government has introduced program initiatives such as the Australians WorkingTogether (AWT) platform in order to promote contribution rates. Furthermore, Australia has launched welfare-to-workschemes, which have shownacceptance in alldistricts. With thesetransformations, the employment forecasts for individualsof age 55 and over are no longer to be taken intoaccount when determining entitlementfor the disability sustenanceallowance. The country is also placing efforts to inspire olderemployees to remainemployed after they become qualified for an old-age annuity. This initiative is taken up to decrease the enticements toretireearly under the superannuation security scheme by aligning thepension age (65) with the age eligibility of superannuation (presently 55, butto be increased to 60 by 2025) over time. The increased superannuation age capwill retainpeople within the workforce for a longer extentby functioning as animpediment against leaving early.
Future risks
Aging population
As the baby-boomer generation in Australia graduallyapproaches the older age range, preserving high per capitarevenue growth will getmore difficult to attain. The amount of people aged below 55, where employmentcontribution isgenerally highest, is projected to dropconsiderablywithin the next 20 years. The government forecastspredict doubling the number of people aged over 65 to double to about 25% of the whole population during the next 40 years, while increasein the population of conventional labour force age is likely to decelerateto nearlynone. Apart from an exceptionalupsurge in fertilityrates, the population’s age compositionis expected to alleviatesubsequently with a much higher percentage of older persons thanbefore.
Technology analysis
Current strengths
Budgetary support for ICT
One of the most rapidly-expandingmarkets in Australia has been thetelecommunications segment. During 2002-09, the cellular phone divisionrevealedan average yearly growth of about9.5%. The government has sustained its habit of backingofkeycommunications and IT programs, predominantlyvia the formation of acontext for digital radio, and has doneextensiveimprovements to fortify the Australian film and television business. The government has sanctioned a $10.5m fundingto two of the major broadcasting set-ups, the Australian Broadcasting Corporation and Special Broadcasting Services, to boost and spread their services to theworld.
High usage of e-commerce
The online business of trade and e-commerce is at a peak in Australia, with over five million residencesutilizinginternet access fromhome. Around60% of small and medium enterprises (SMEs)trade sectors use internet for their dealings and over 50% of these SMEs use the internet to vend their products and services. In 2008-09 the business industry has disbursedat least $2 billion on marketing online. It is assessed that by 2015, over $20 billion will be funded by e-commerce to the country’s economy. With the broadband developmentacross the nation, the e-commerce industry is set to magnify its standand access numerousconsumers.
Future prospects
International co-operation on science
In April 2008, Australia and India set up a combined working group (JWG) as a share of their worldwide science allianceto form a guidelineto reinforce bilateral collaboration in science and technology. Preceding this distinctivearrangement, 21 assignments were already operational under the India-Australia Strategic Research Fund for innovative scientific expansion. The JWG was established to fortifymutual scientific co-operation concentrating on industrial research and development, and cutting edge technology capacitiessuch as nano-composites, bio-energy, health and agricultural biotechnology, climate change and renewable energy, particularly photo-voltaic technology.Moreover, Australia and China collaborate together through the China-Australia Special Fund for advanced science and technology development. Also, thecommonwealth has made scientific bilateral partnerships with the US, Canada, South Korea and Japan.
Legal analysis
Overview
The judicial system in Australiaconsists of a supreme court for every state, the High Court for the entirenation and various district level courts within a state. The country has explicitanti-terrorism decrees and supports numerous countries to combatradicals.
Current strengths
Liberal business regulations
Australia is recorded as the greatest open economy amid its affiliate countries by the OECD. Itadministers market-friendly strategies and has a very generous legal system. In its yearlyappraisal of reforms in 30 affiliate countries, ‘Going for Growth 2010’, the OECD indicated that out of all its fellows Australia has the lowest general level of regulation. On the other hand, Australia was graded in the lower half on three indictors, especiallylimitations on foreign investment, regulation of telecoms, and legal barriers to market entry. On the majority ofchecksconcerning the level of regulation, Australia was ranked amongst the top six. It had the second lowest levels of red tape with regards to business processes, the third most liberal laws in terms of retail supply, and the fourth smallest context of specific industry protocols.Additionally, as per the World Bank’s2010 Doing Business Indicators, the nation was ranked 3rd out of 183 countries on the simplicity of establishing a business. It takes just two days and two processes to initiate abusiness there. This ranking illustrates the room for further development and growth of economic movement in the country.
Current challenges
Investment restrictions in select sectors
Notwithstandingnumerous measures of liberalization, littleboundaries with regards to venture in certainsegments still occur in Australia. Investment in media, transport and communication has not been abundantlyopened. For example, cross-media possession is only permittedbound byprovisionsthat at least five separatevoices stay in cosmopolitanmarkets and four in local markets. Likewise, overseas investment in airlines is exposed to stricterconditionsthan the typical limit of 49% of the equity in an Australian international airline. Moreover, foreign investment tenders for acquisitions of Australian airports are bound byinspection in harmony with the customaryreportprerequisitesand prior endorsement is essential for foreign access into the telecommunications segment. The presence of such prerequisiteshinders foreign investment in significant areas.
Future prospects
Restructuring of competition law
The Australian regime has indicated that it will exercisevarious measures aimed at stimulating competition and cracking down on monopolistic practices by influentialcompanies. The intendedalterations to the Trade Practices Act (TP Act) 1974 compriseof moves to protect small businessfurther from ravenouspricing and provide the industrywith a perpetualsay in the Australian Competition and Consumer Commission (ACCC), the trade watchdog. These stepsaim to guaranteeopenrivalry for the sake of both customers and small businesses. Moreover, it is anticipated that the freshlawswill prepare for impeaching businesses that exerciseexploitation. The platform will also grant small set upseconomical and more effective judicial contact, and allow cases concerning a misapplication of market command to be presented in the federal magistrate’s court instead of in the federal court. Since August 2009, lobbying and movementsdemonstrating the presence of unions are forbidden, in the attempt to restrain anti-competitive approaches.
New reforms
In May 2010, The Kevin Rudd regime has proclaimedkeyvariations in taxation. The government is to announce a new 40% ‘Resource Super Profits Tax’ on mining tasks. Itestimates that the recent supply tax will raise $9 billion during 2012-13. Until 2008-09, the duty paid by mining firms was merelyabout $1 for every $7 income earned. Additionally, corporate tax rate will drop from 30% to 28%, staged in by 2015, with small establishments to benefit out of the lesserchargeby 2012-13. Therise in the superannuation security from 9% to 12% was the other substantial tax quota, to enableimprovedstandards for the retired.
Future risks
Rigid legal action on corporate sector
The regulatory authority for financial foundations,the Australian Securities and Investment Commission (ASIC),abides by the corporate laws quitesternly and assessesbusinessmovements with unduediligence. Actually, the application of laws is so harsh that the ASIC is nearly considered to be the mainbarrier for conducting opentrade. As a consequence, some of the country’s most capabletradesmen are avoidingpresidencies, as they fear being prosecuted for any alleged negligence or error. This reluctance is largely due to the ASIC placingindividualaccountability upon professionalstaff. Moreover, some risks taken by corporations are tacticalhowever, due to stiffrules;companies now tend to be reserved. Such rigid rules may convey a pessimistic sign to commercialfirms and impede the regularperformanceof these enterprises.
Environmental analysis
Overview
The Australian administration has thoroughpolicies existent to safeguard the environment. Furthermore, iturgesall residents to partake in caringfor the environment viamanymodes. The government has also been dynamicallyadvancing numeroustechnologies that are environmentally friendly. Australia has already begun to observethe resultsof global warming, oftenundergoingweather change. One of the greatestbrutaloutcomesof increasing pollution levels has been the diminishingrange of the Great Barrier Reef. Australia also suffered pollution due to woodlandblazes in South America that emittedexcessive extents of carbon monoxide
Tight environmental policies
Environmental supervision and regulation is taken quite seriously in Australia. For instance, in mid-2007, the Department of Environment and Conservation deferredprimeconsignments from Esperance, a private shipping port in Australia, due to contamination of the oceans with lead that slayed thousands of birds in the region. An examination also traced higher levels of lead and nickel in freshwaterreservoirs in the region, and some occasions of high lead levels in the blood of numeroustenants, provoking a legislativeinvestigation. The port enterprise was accused with irrationalsecretions and was given a fine of nearly $1m. In November 2008, the Australian government declared the formation of the Green Car Innovation Fund as part of the pioneering car design for a healthier future. These sorts of positive movements against environmental hazards have put all of the businesses on the watch in the country.
Environmental research
In Australia environmental research has taken anideal and ecologicalcourse. Various environmental research packages now assume community-based attitudes and strategies, even though there is little relevance in Australian nativesocieties. Several environmental expertsrecommend the participation of aboriginal (and nonindigenous) participants in research. Agenda 21 and the Convention on Biological Diversity were results of the 1992 United Nations
Agenda 21 is a universaldeedproposal that upholds the environment and the advance of partnerships, and is braced by globaltreaties on the preservation and viable use of environmental assets. These strategydevicessponsorschemesthat simultaneously deal with environmental deprivation. Signatory realms to the Convention on Biological Diversity input a soundallotment of technologies, and project assets and benefits, with ethnic people and developing countries. Australia is a participantcountry to both Agenda 21 and the convention, and has taken steps to sustain its pledge under both accords.
Current challenges
Rising pollution levels
The increasinglevels of pollution are resulting in environmental disturbance in Australia, and are only deteriorating. The percentage of the country’s land that is open to suitableharvest has now dropped to 8%, and wetlands in the Murray-Darling basin have come down by 90%. Even the shore and ocean life are largely threatened in Australia; the forest unit has also revealed that water reserves from woodland to the Melbourne’s supply reservoirs have decreased by 50%. Carbon dioxide releases have also been increasing, growing from 381 million metric tons in 2004 to more than 414 million metric tons in 2009.
Although there are numerous policies in place, the government is confronting challengesinlimitingthe intensifying pollution levels. This is mainlybecause of increased reliance on coal for power.
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