Doing Business in Australia

-Kala Madhavan Madam

(Perspective Management)

Group MembersGroup Members

Swapnil Baikerikar - 04 Avanti Darade – 12 Sayali Phatak – 44 Tushar Sadhye – 47 Nikita Watve - 55

What does PESTLE Analysis mean?What does PESTLE Analysis mean?

It’s Framework used to scan the organization's external macro environment.

Letters PESTLE stands for-

I. Political

II. Economical

III. Socio – Cultural

IV. Technological

V. Legal

VI. Ecological

Political EnvironmentPolitical Environment

Meaning- Political environment refers to the stability of the political environment & the attitudes of political parties/movements.’

This manifest in government influence on tax policies, or government involvement in trading agreements.

In case of Australia, it is a liberal-capitalistic democracy. Here, the state keeps interfering substantially in the economy through various roles; for instance parliament might decide to set up importation taxes aimed to protect the national economy or environmental protection laws aimed to protect the natural heritage of the country.

How does Government intervene in International How does Government intervene in International Business? (Home country i.e. India)Business? (Home country i.e. India)

Tariffs Subsidies Import quotas & VER(voluntary export restraints ) Currency controls Local content requirements Anti-dumping rules Export financing Free- trade zone Administrative policies

Why businesses choose Australia (Sydney & Why businesses choose Australia (Sydney & New South Wales)- Host CountryNew South Wales)- Host Country

Sydney – business & financial capital Strength , Stability & open Government Time zone advantage Favorable tax system Competitive business costs World class infrastructure & communications

Economical EnvironmentEconomical Environment

Meaning :It refers to economic conditions, systems, policies of respective country.

Economic factors that commonly affect businesses include consumer confidence, employment, interest rates and inflation.

In case of Australia, it is one of the largest capitalist economies in the world. It is dominated by service sector. Economic growth is dependent on mining and agriculture sectors.

How does economic factors ( of home country How does economic factors ( of home country i.e. India) determines business conditions)i.e. India) determines business conditions)

Economic condition Economic system Government Policies Industrial policies Import export policies Demographic factors:-I. PopulationII. Income levelIII. AgeIV. Demand etc.

Why to do business in Australia? (host country)Why to do business in Australia? (host country)

Ease of doing business index: 10th rank Continuous economic growth Low unemployment Contained inflation Very low public debt Strong and stable financial system Open market with minimal restrictions

SOCIO CULTURAL ENVIRONMENT

MEANING: A set of beliefs, customs, practices and behavior that

exists within a population. International companies often include an examination of

the socio-cultural environment prior to entering their target market.

Social environment has a great influence on the international business environment.

Culture is a sum total of man’s knowledge, beliefs, art, morals, laws, customs and any other capabilities and habits acquired by man as a member of society.

Social environment

Collection of diverse people: Australia is a collectivity of diverse peoples living in a relatively young society.

No official Religion: Anglicon 26.1%, Roman Catholic 26%, Other Christian 24.3%, Non-Christian 11%, Other 12.6%

Increase in level of Education: Today, Australians are more highly educated than ever before.

British Australian Tradition: There has been a focus on assimilating different cultural groups into the dominant British Australian traditions.

Cultural Environment

Factors that have shaped the national culture include the early small female population relative to that of men, which is said to have laid the foundations for a widespread ideology of mateship.

The involvement of Australian and New Zealand troops in World War I has been characterized as the symbolic birth of the nation.

Australia is a Multi-Cultural Society. English is the primary language used in Australia. Within the framework of Australia’s laws, all Australians have the

right to express their culture and beliefs and to participate freely in Australia’s national life.

Technological EnvironmentTechnological Environment

Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation.

Research funding :- Gross Expenditure on R&D was $30 billion in 2010-2011.There are a number of government grants and funding programs available to assist Australian businesses develop and commercialize their IP, such as;

Export Market Development Grant Innovation Investment Fund (IIF) R&D Tax Incentive, etc

New Discoveries and InventionsNew Discoveries and Inventions

Here are some of the highlights of Australia’s Greatest Technological Achievements.

Refrigerator Electric Drill Black box Flight Recorder Bionic Ear Xerox Photocopying Wifi Lawn Movers Anti Hacking Software Kernel, etc

Energy Sources & InternetEnergy Sources & Internet

Energy in Australia includes energy and electricity production, consumption and export in Australia. Australia is a net energy exporter, and was the fourth-highest coal producer in the world in 2009. Fuels in Australia include fossil fuels such as coal, oil, natural gas, oil shale and also renewable sources such as wind power and solar power.

Permanent Internet access was first available in Australia to universities via AAR Net in 1989. The first commercial dial-up ISPs (Internet Service Providers) appeared in capital cities soon after and by the mid-1990s almost the entire country had a wide choice of dial-up Internet access providers. In present times Internet access is available through a range of technologies, chiefly hybrid fiber coaxial cable, DSL (digital subscriber line), ISDN and satellite Internet.

Internet statistics In March 2007, there were approximately 4.33 million broadband subscribers in

Australia and 2.09 million narrowband subscribers. Between December 2007 and June 2008 there was an increase in the number of wireless internet subscribers from 433,000 to 809,000.

TransportTransport

There are many differing forms of transport operating in Australia for carriage of passengers and goods. There is a general reliance on road transport and the country is networked with about 900,000 km of roads. Private road haulage contractors compete to some extent with railway freight systems within and between states, particularly for agricultural products and minerals transport to ports. The rail network consists of over 40,000 km of track in total. Public transport is not as well developed in Australia as many other first world nations, for example none of the capital cities boast fully fledged metro rail systems and while the capital cities are connected to each other by rail services, they are not high speed services. Passengers and freight are also transported extensively by air between the 450 or so airports and airstrips around the country, particularly for business travel.

Legal EnvironmentLegal Environment

Understanding Australian regulatory obligations is essential for any business. These regulations are designed to ensure fair competition, sufficient protection for the relevant parties, and integrity in the market.

Australia’s business law is flexible and makes the procedure of opening up a business simple and easy to achieve for one and all.

STEPS BEFORE SETTING UP OF BUSSINESSSTEPS BEFORE SETTING UP OF BUSSINESS

Registering as a foreign companyRegistering as a foreign company

Obtaining business premises in AustraliaObtaining business premises in Australia

Source of FinanceSource of Finance

Exchange controlExchange control

Australian Business TaxesAustralian Business Taxes

CORPORATE TAX

Goods and Services Tax (GST)

Capital Gains Tax

Other business taxes

Import and Export RegulationsImport and Export Regulations

Australia is a member of the world trade organization and has undertaken not to raise tariff above level agreed in trade discussions.

Businesses considering importing should be aware of government regulations, duty taxes, permits that apply to imported goods. Imports that do not meet these requirements can be seized by the Australian Customs and Border Protection Service.

Exports are rarely subject to any form of tax in Australia.

Intellectual Property RightsIntellectual Property Rights Patent protection Trade mark protection Copyright protection Government Incentives and Grants:- The Australian government offers a wide range of grant schemes

and incentives to promote and develop foreign investment in Australia.

The Australian Trade Commission (Austrade) is a dedicated government agency that seeks to promote and support productive foreign investment into Australia. The incentives offered take a wide variety of forms including taxable grants, tax relief or the provision of infrastructure services at discounted rates.

Laws relating to competition and unfair trade practices

Ecological EnvironmentEcological Environment

Ecological environment refers to all living and non-living thing around us within which we live and work. People have a two way relationship with the ecological environment. An individual lives and work is affected by the ecological environment he or she lives in. At the same time ecological environment gets affected by the people in it.

Managers must take into account the ecological factors in their decision -making. By ecology one can understand the relationship of people and other living things with their environment, such as soil, water, and air.

Land, water, and air pollution is of great concern to all people. Land may be polluted by industrial waste such as packaging. Water pollution may be caused, e.g., by hazardous waste and sewage. Air pollution can be caused by a variety of sources, such as acid rain, vehicle exhaust fumes, and carcinogens from manufacturing processes.

Water: It's hardly surprising that on the world's driest inhabited continent, experts are concerned about how Australia looks after its water.

Climate change: It may be a global issue, but when scientists across the world are asked what the effects of climatic change will look like, they quickly point to Australia.

Energy: Australians are replacing fossil fuels by renewable powers like solar, wind, marine, etc.

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