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STRONG ECONOMIC CREDENTIALS
An economy positioned
for recovery
Australia's reputation
as a highly competitive economy continues to strengthen. In 2009, the
Australian economy was ranked in the top three countries in the
Asia-Pacific region for its overall competitiveness. Among countries
with a population of 20 million or more, Australia ranks second in the
world, behind only the United States. (Source: IMD, World
Competitiveness Yearbook, 2009).
For many years Australia
has outperformed OECD economies in both growth and resilience of the
economy. For six of the last eight years, the Australian economy has
been found the most resilient in the world and its average growth rate
from 1998-2009 was 3.4 per cent. (Source: Ibid)
This, together with a
strong and independent financial sector and an effective and proven
regulatory financial system, means the Australian economy provides a
sound platform for foreign direct investment and business growth.
Australia is a serious
trade and investment player, generating more than 20 per cent of GDP
from exports and more than 36 per cent from FDI stock and its economy is
now predominantly services-based, with services accounting for just over
60 per cent of economic activity. (Source: Australian Bureau of
Statistics, June 2008)
Australia¡¯s exposure to
and engagement with the Asian region - which still has the most dynamic
growth potential in the world ¨C offers a strategic advantage to
companies looking to position themselves for global growth
opportunities.
While Australia, as
elsewhere, has been affected by the global economic downturn, the
Australian Government responded quickly to counter recessionary
pressures by spending proportionally more and earlier in terms of fiscal
stimulus. (The IMF¡¯s aggregate target for fiscal stimulus is 2 per cent
of GDP and in Australia fiscal measures account for 2.1 per cent of GDP.
This percentage is greater than that of the G20 PPP-GDP weighted average
and higher than the UK, US, Canada, Germany, France and Japan - as of
March 2009). Australia¡¯s recession looks like it will be smaller than in
much of the rest of the developed world. (The IMF World Economic Outlook
[April 09] indicates Australia will recover more quickly in 2010 and
with higher growth than the UK, US and Eurozone).
Looking ahead, the
Australian market is open for trade and foreign investment and has the
capacity to deploy both our own and other people¡¯s capital carefully and
profitably. The Government has not had to give direct financial support
to the banking system and Australia will be free of the difficult
governance and exit strategy issues that such support is raising in a
number of other countries.
Few countries have as an
attractive proposition to offer to international investment capital and
to their own citizens over the years ahead. (Source: Glenn Stevens,
Governor of the Reserve Bank of Australia - speech available from
www.rba.gov.au)
GROWING FOREIGN
INVESTMENT
Australia is an
attractive destination for foreign direct investment
Australia is seen as an
attractive destination for foreign direct investment (FDI). Over the
last five years, inward FDI stock has increased by an average of 5.8 per
cent per annum.
Australia now attracts a
high level of FDI compared to other developed economies. The ratio of
FDI to GDP is almost 36 per cent which is well above the average for
comparable developed economies of 25 per cent (IMF/UNCTAD/AUSTRADE).
As of 30 July 2010, the
stock of inward FDI in Australia was A$436 billion. The top four source
countries were the United States, the United Kingdom, Japan and the
Netherlands.
Out of the top 10 source
countries, Singapore, Japan, Germany and the Netherlands have shown the
strongest growth in FDI stock into Australia over the last five years.
The European Union
remains Australia¡¯s largest regional bloc source of FDI, accounting for
close to 34 per cent of total FDI stock in 2009.
(Sources- ABS 5352.0 -
International Investment Position, Australia: Supplementary Statistics
2009, UNCTAD World Investment Report to 2009)
DEMOCRATIC AND POLITICALLY STABLE
Business in Australia has a high degree of
certainty
Australia is a safe destination for
investment. The country's political and regulatory environment is
stable, open and progressive, providing investors with a high degree of
confidence and certainty.
Australia's strength as an investment
destination stems, in part, from a political system that has been
assessed as being highly effective in responding to economic challenges
and policy direction. The adaptability of Australian government policy
to changes in the economy has been ranked in the top two countries in
the region (Source: IMD World Competitiveness Yearbook 2009). Similarly,
the transparency and effectiveness of government are also rated highly
(Source: Ibid).
Efficient and transparent legal framework
Australia also has an open, efficient and
transparent legal framework. Corruption levels are judged lower than
those in the US, the UK, Canada and most regional countries (Source:
Ibid).
These results can be attributed to a strong
system of checks and balances, and a highly respected judicial and law
enforcement system.
Stable political environment
The benefit to companies of a stable
political environment can flow right through to the bottom line.
'Australia is one of the most important
markets for Ericsson in the Asia-Pacific region. Australia hosts a
growing economy; a stable political and business environment; a skilled,
well educated and multi-lingual workforce; a strategic time-zone and a
competitive cost base. These factors provide a sophisticated market and
the right environment enabling Ericsson to drive innovation and
technology.'
- Hans Vestberg, Executive Vice President,
Chief Financial Officer and Head of Group Function Finance, Ericsson.
BUSINESS FRIENDLY
REGULATORY ENVIRONMENT
It's easy to do business
in Australia
Australia has one of the
most transparent and efficient regulatory environments in the world.
Through proactive reforms, the Australian Government has shown a strong
commitment to providing businesses with the right conditions for growth
and investment.
Best practice
regulation
Australia's business
friendly regulatory environment is undisputed. In 2006, the OECD cited
Australia¡¯s approach to regulation as a best practice benchmark for
other OECD countries (Source: OECD Going for Growth, 2006).
Australia was identified
as having the fewest restrictions on product markets of the 30 OECD
countries, the least public ownership of business and the least
restrictive impact of business regulation on economic behaviour.
Regulatory standards
In fact, with regulatory
procedures taking just two days, Australia has been ranked as the third
fastest place in the world to start a business (Source: The World Bank
Doing Business 2009).
Businesses can invest in
Australia with confidence in the security and transparency of
Australia's regulatory systems. This provides predictability and
certainty for business planning.
Unlike many countries in
the region, there are no foreign exchange controls in Australia and the
currency is fully internationalised.
Capital flows, profit
remittances, capital repatriation, transfer of royalties and trade
related payments remain largely free from regulation.
Transparency in
government policy is considered third best in the region, and
Australia's legal and regulatory framework has been rated one of the top
six economies in the world for encouraging enterprise competition
(Source: IMD World Competitiveness Yearbook 2009).
The Australian
Government's commitment to continuous improvement in areas such as
intellectual property (IP) reform and business immigration ensures a
streamlined, business-focused regulatory environment.
Recent reforms focus on
greater labour market flexibility, trade liberalisation, industry
deregulation, reductions in tariff barriers and the development of a
better tax system ¨C resulting in strong productivity and enabling
businesses to be highly responsive to economic conditions.
Corporate governance
Not only is government
policy in tune with business imperatives, but so too is corporate
governance. Australian corporate boards are ranked sixth most effective
in the world and second in the region for the supervision of the
management of companies (Source: Ibid).
In addition, Australia
is ranked seventh in the world and second in the region, after New
Zealand, for the implementation of ethical practices in companies
(Source: Ibid).
Transparency
Australia has a highly
professional and transparent public service, which is reflected in its
rating in the top seven countries in the world (Source: Ibid).
The inherent value
system in the society promotes competitiveness and has been rated fourth
most supportive of business competitiveness in the world (Source:
Ibid).
Intellectual property
As the knowledge economy
gathers pace, a strong intellectual property framework is critical to
business success. Australia ranks highly for its enforcement of
intellectual property rights ¨C second in the region and eighth globally.
In terms of adequate
protection of cyber security, Australia ranks thirteenth globally and in
the top four countries in the Asia-Pacific region (Source: Ibid).
For personal security
and protection of private property, Australia ranks sixth globally and
first in the region (Source: Ibid).
HIGHLY SKILLED AND
MULTI-LINGUAL WORKFORCE
Australia's population
is a diverse and rich multicultural mix
Ask any executive what
makes their business successful and chances are they could sum the
answer up in two words: our people. So it is in Australia.
Over the past decade
Australia has enjoyed a sustained period of strong productivity growth,
attributable largely to a highly educated and competitive workforce.
Australia¡¯s workforce offers substantial multilingual and cross-cultural
capabilities at relatively low cost, and is characterised by a strong
work ethic and positive approach to change.
Rising productivity,
falling labour costs
Australia¡¯s skilled
workforce and investment in business innovation has enabled the country
to achieve high levels of productivity, and real unit labour costs have
fallen consistently since 2000. Consequently, Australia¡¯s workforce is
one of the most competitive workforces in the Asia-Pacific region.
Educated resource
pool
The intellectual gene
pool of Australia's workforce is constantly replenished by an
internationally acclaimed tertiary education sector (ranked ninth in the
world by the IMD World Competitiveness Yearbook 2009), in combination
with an immigration policy that is attuned to the needs of industry.
Australia's 41
universities have trained hundreds of thousands of scientists,
architects, engineers, financial advisors and other professionals now
working in Australia, the US, Europe and Asia. These universities have
diverse and rigorous research programs backed by quality facilities.
Australia has been ranked equal first in the world for general literacy
(Source: Ibid), and on average across all industry sectors, 24 per cent
of Australia¡¯s workforce holds a tertiary qualification.
In addition, Australia¡¯s
working environment has proven to be highly attractive to skilled
workers, ranking third in the world for attracting and retaining talent
in a study of 57 key economies. The country was also found to have the
fourth most attractive business environment for highly skilled foreign
students and has the highest number of foreign tertiary level students
per 1,000 inhabitants (Source: Ibid). As a result, Australia¡¯ workforce
has continued to grow steadily ¨C in recent times, by more than 200,000
people per year.
Australia¡¯s workforce is
also considered to be technology savvy, having the third highest number
of Internet users and the seventh highest number of computers per
thousand people (Source: Ibid).
Multilingual
workforce
Australia¡¯s citizens
originate from more than 200 countries, and the country is home to one
of the most multilingual workforces in the Asia-Pacific region, giving
it the capacity to offer workforce solutions requiring multilingual and
multicultural sensitivities.
Some 5.5 million people
living in Australia, representing approximately a quarter of the
country¡¯s population, were born overseas, with substantial
representation from European, Asian and Middle Eastern countries.
Approximately three
million Australians ¨C or 25 per cent of the labour force ¨C speak a
language other than English at home, with around 400 different languages
spoken in homes around the country. Almost 1.2 million Australians are
fluent in major European languages, and nearly 1.5 million speaking an
Asian language at home (with more than 500,000 speaking a Chinese
dialect) (Source: Australian Bureau of Statistics ¨C 2006 Census).
Australia¡¯s linguistic
diversity, the proficiency with which the languages are spoken, and
strong cultural links with Europe and Asia provide an ideal mix for
multinational organisations setting up or expanding their business in
Australia.
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