Nubs mba group management project team

5. Legal

   1. Legal Framework

Overall, Australia has nine legal systems. There are eight state and territory systems and only one federal system. The states have independent legislative powers. However, the federal laws prevail in case of contradiction between state and federal laws. The state and federal systems have three branches – legislative, executive and judicial. The Parliament makes the laws, the executive government is responsible for administering these laws and lastly the judiciary needs to interpret and apply them.

Australia aims to encourage international cooperation in the legal sector. Also, fighting against terrorism and corporate crime is given high priority by the government. International cooperation guarantees that criminals cannot go scot-free by just crossing borders. Australia has official extradition agreements with more than 100 countries. It has also been actively involved in improving laws governing the international trading system (Legal System, 2008).

2. Business Perspective

6. Environmental

   1. Saving the planet

As part of the Clean Business Australia initiative, it has launched the ‘Climate Ready’ program to encourage businesses to develop and commercialize products and services that save energy, reduce pollution and use waste in innovative ways. There is also the ‘Green Building Fund’ to help businesses make energy efficient cost savings by retrofitting office buildings (Department of Industry, Science and Research, 2009).

7. Appendix G: Australian Facts and agreements

1. Facts

1. Growing foreign direct investment

• 
  Over the five years to June 2007, the stock of foreign direct investment in Australia increased by a substantial 155% to US$279 billion. There was a 29% increase in 2006-07 (ABS 2007).
  
• 
  Over the decade to 2006, Australia was the fifth largest net recipient of FDI in the OECD (OECD, 07)
  

2. Strong economic credentials

• 
  Australia has been ranked the most resilient economy in the world for 5 of the past 6 years (IMD WCY 2007)
  
• 
  It is forecast that Australia’s economy will grow at an average annual rate of 3.1% from 2007-2010, significantly higher than the growth rate of most other OECD countries (EIU World Invest Prospects 2007).
  
• 
  Over the nine years to June 2007, the compound annual growth rate of company gross operating profits was 14.5% (ABS June 07)
  
• 
  Australia is a sophisticated, knowledge based economy with services now accounting for 79% of total gross value added (ABS June 07).
  

3. Strategic location

• 
  Asia's economies are forecast to account for 44% of world GDP by 2017 (purchasing power parity), significantly more than the US and Europe combined. (Consensus Eco, IMF, Eco @ ANZ).
  
• 
  Australia’s unique time zone advantages, its cultural affinity with Asia, and its American/European business environment make it a perfect business bridge to Asia or western locations. Companies can benefit from ‘follow-the-sun’ operations.
  
• 
  Japan and China are Australia's top two trading partners. Australia has FTAs in place with the US, Singapore, Thailand and New Zealand. It is negotiating FTAs with China, Japan, Malaysia, ASEAN, the Gulf Cooperation Council and Chile.
  
• 
  Between 2002 & 2006, services exports to China increased by more than 110%, to India by 230% and to South Korea by about 60% (ABS 2007).
  

4. Democratic and politically stable

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  Australia has the lowest risk of political instability in the region and 4^th lowest in the world (WCY 2007).
  
• 
  Australia has been ranked third in the world as a place in which to conduct business with the least amount of risk (Dunn & Bradstreet Nov 07)
  
• 
  Australia's justice system has been rated second best in the region (WCY 2007) and its competition legislation has been ranked fifth best in the world for facilitating competitive business (WCY 2007).
  

5. Business friendly regulatory environment

• 
  Australia is ranked first in the world for its corporate governance standards (Gov Metrics Int. Sept 07)
  
• 
  Australia is the fastest place in the world to start a business with regulatory procedures taking just two days compared to an OECD average of 15 days (World Bank 2007).
  
• 
  Of the 30 OECD countries, Australia has been identified as having the fewest restrictions on product markets, the least public ownership of business and the least restrictive impact of business regulation on economic behaviour (OECD 2007).
  
• 
  Australia ranks second in the world for the effective supervision of the management of companies by corporate boards (WCY 2007).
  
• 
  Australia ranks first in region and third globally in managing shareholder value efficiently. It also ranks third in the world for the ethical practices of companies (WCY 2007).
  

6. Highly skilled and multilingual workforce

• 
  Australia ranks first in the Asia Pacific for labour, agricultural and industrial productivity per person employed (purchasing power parity) (WCY 2007).
  
• 
  GDP per person employed in Australian industry is more than three times higher than in China and five times higher than in India (WCY 2007)
  
• 
  Australia is home to one of the most multilingual workforces in the Asia Pacific region, with citizens from over 200 countries. More than a quarter of Australia's labour force was born overseas, with substantial representation from European, Asian and Middle Eastern countries (ABS 2007).
  
• 
  The number of working days lost per thousand employees has declined from 265 in 1988 to 15 in 2006, a reduction of 94% (ABS 2007).
  
• 
  On average across all industry sectors, over 30% of the Australian workforce has tertiary qualifications compare to an OECD average of 23% (ABS 2006).
  

7. Cost competitive location

• 
  In a recent survey of 128 cities in ten countries, Australia ranked as the second most cost competitive nation, with a cost advantage of 8% over the United States (KPMG 2006).
  
• 
  Cost of prime office space in Sydney is 70% less than in London, 70% less than in Tokyo, 50% less than in Hong Kong and 65% less than in Mumbai (CB Richard Ellis, GMR, and May 2007).
  
• 
  Australia is the eighth lowest taxing country in the 30 member OECD, with its tax revenue as a percentage of GDP being 31.2%, compared to an OECD average of 35.9% (OECD 2006).
  
• 
  Electricity costs per kilo-watt hours for industrial clients (US$0.060) are cheaper in Australia than in the UK, Singapore, Germany, Hong Kong, Japan or India (WCY 2007)
  

8. Innovative with excellent R&D and IT infrastructure

• 
  Australian Government support for innovation includes substantial R&D tax concessions of up to 175 per cent.
  
• 
  In 2005-06, business expenditure on research and development increased for the 7^th consecutive year to a record $10.1 billion, effectively doubling over the past five years (ABS 2007).
  
• 
  Australia has been ranked first as a location to conduct clinical trials when benchmarked against the UK, the US, Germany, India, Japan and Singapore (EIU Pharmaceutical Benchmarking Study Nov 2005).
  
• 
  Australia ranks 4^th in the world for IT infrastructure and skills, and 5^th for IT industry competitiveness and productivity (EIU 2007).
  
• 
  Australia ranks third in the Asia Pacific for e-readiness (EIU 2007) and for providing a supportive legal environment for scientific research (WCY 07).
  
• 
  Australia ranks fourth in the world for internet use (743 users per 1,000 people) and in the top eight countries in the world for per capita computer use (762 per 1,000 people) (WCY 2007).
  
• 
  Australia has a strong Cooperative Research Centre (CRC) program that combines the research efforts of the public and private sectors in approx 70 CRCs operating in a wide range of industry sectors.
  

9. Strong and sophisticated financial services sector

• 
  At end June 2007, Australia had the fourth largest investment fund asset pool in the world at US$1.1 trillion (ABS 2007).
  
• 
  Australia’s stock market is the largest in Asia ex-Japan, and ranks 7th in the world. Australia's market capitalization (by floating stocks) is US$1.14trillion; almost triple the size of Hong Kong market and five times larger than Singapore (S&P/Citigroup, Jul 2007).
  
• 
  In terms of global turnover, Australia's foreign exchange market is the 7th largest in the world, the Australian dollar is the 6th most traded currency and the A$/US$ is the fourth most traded currency pair globally (BIS, Triennial Central Bank Survey 07).
  
• 
  Australia is a regional leader in the issuance of international and domestic debt securities and has more international debt securities (US$475 billion) than any other Asia Pacific nation (BIS, Sep 07).
  

10. Better quality of life

• 
  Australia's quality of life is ranked first in the Asia Pacific (WCY 2007). Five Australian capital cities are ranked in the top eleven lovable cities in the world (EIU 2005).
  
• 
  Australia's human development index (HDI) is the third best in the world (WCY 2007).
  

2. Particular agreements

(Source: HMRC, http://www.hmrc.gov.uk/manuals/dtmanual/dt2656.htm, viewed 12/08/09)

DT2656 - Particular agreements: Australia: Source of income

Article 21 (19(3) in the old Agreement) determines, for credit purposes, the country in which certain types of income are deemed to have their source.

The new Agreement provides that income which may be taxed in Australia under the Agreement shall, for the purpose of Australian tax law, be deemed to arise from sources in Australia. The income in question relates to property, business profits, international traffic, dividends, interest, royalties, gains, employment and fringe benefits, entertainers, sportsmen and government service.

Under the old agreement:

(a) Australian tax borne by a United Kingdom resident in respect of dividends paid by a company which is a resident of Australia under Australian law is to be treated as tax on income from sources in Australia even if the paying company is also resident in the United Kingdom under United Kingdom law.

(b) Interest and royalties, which under Australian law are derived from sources within Australia or which, being derived by a non-resident of Australia, are subject to withholding tax there, are to be treated as having an Australian source.

8. Appendix H – Financial Notes for Cost-benefit/Budget and Break-even analyses (12.1)

Acknowledgements

We acknowledge the valuable inputs from our Supervisor, our interviewees from the usability, research and media industry all over the world, as well as other people who helped us in accomplishing this project.

1^ In year 2007, Korea cell phone manufacturer LGE co-brand with luxury brand Prada and launched LG KE850. In 2007 and 2008, KE850 sold well and hit million sets of sales despite its high price- $600 per set. (Global insight)

2^ In year 2007, Pfizer announced to form a strategic alliance with Alliance Boots (Times online, 2007)

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