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This publication is available at https://www.gov.uk/government/publications/exporting-to-australia/exporting-to-australia
1. Australia export overview
Australia is the fifth largest economy in the Asia-Pacific region, and the 13th largest economy in the world. It has had 25 years of uninterrupted economic growth. Australia’s GDP per capita at current exchange rates make its citizens among the world’s top 5 wealthiest.
Contact a Department for International Trade (DIT) Australia export adviser for a free consultation if you’re interested in exporting to Australia.
Around 1,500 British businesses operate in Australia, including well-known companies like BP, HSBC, British Airways and BT, as well as hundreds of small and medium sized companies. Australia is ranked by the World Bank as the 7th easiest country in which to set up a business and falls within the top 5 countries globally on the Index of Economic Freedom. You can set up a new business in Australia within 2 days.
There are more British citizens in Australia than in any other foreign country. 1.2 million Britons are permanent residents in Australia and over 600,000 visit every year.
Benefits for British businesses exporting to Australia include:
- proximity to Asia Pacific economies
- familiar products and service providers
- common language and similar culture
- similar business and legal practices
- similar technical standards
Strengths of the Australian market include:
- an extended period of strong economic growth
- strong business and consumer base
- strong technology sector
- similar language, culture and business practices
- high personal wealth
- strong intellectual property (IP) protection
2. Challenges of doing business in Australia
Doing business in Australia is very similar to doing business in the UK. If your product or service is successful in the UK, there’s a good chance you’ll be successful in Australia. However, there are certain unique challenges when doing business in or with Australia. These include:
- Australia’s eastern cities are approximately 24 hours away from the UK by plane
- Australia covers 3 time zones and is as big as the USA
- distances between capital cities are vast, eg Perth is nearly 3,300 kilometres from Sydney
- Australia is between 7 and 11 hours ahead of the UK
- weather extremes in winter and summer can have an impact on businesses
- currency fluctuations between $AUD and Sterling can impact the cost of doing business in Australia
3. Current benefits and growth potential
3.1 Economic growth
Australia has had one of the best-performing advanced economies in recent decades. This success is due to a number of different factors including:
- sound fiscal management
- strong population growth
- rich in natural resources - particularly iron ore, coal, gold and gas
- close ties to fast-growing Asia
More than 70% of Australia’s economy is services based.
Annual economic growth rose from 2.5% in 2014 to 3.3% in 2016 and is forecasted to remain steady in 2017.
Unemployment stood at 5.6% in late 2016 and inflation was contained at around 1.3%.
Australia’s exposure to, and engagement with, the fast-growing Asian region can help British companies looking to expand into this region. Seven out of Australia’s top 10 trading partners are Asian countries. More than 2 million Australians (approximately 10% of the population) speak an Asian language at home.
3.3 Free trade agreements
Australia has free trade agreements currently in place: China, Japan, South Korea, New Zealand, Singapore, Thailand, USA, Chile, the Association of South East Asian Nations (ASEAN) (with New Zealand) and Malaysia. The countries covered by these agreements account for two thirds of Australia’s total trade.
These free trade agreements mean that parties enter into legally binding commitments to relax access to each other’s markets’ for goods, services, and investment.
UK-Australia Free Trade Working Group
In 2016, Australia and the UK agreed to establish a bilateral Trade Working Group to begin scoping out the parameters for a future Free Trade Agreement.
An initial meeting was held in December 2016 between UK Minister for Trade Policy, Lord Price CVO and Australian Minister for Trade, Tourism and Investment, Steven Ciobo MP. The group aims to meet annually, beginning early 2017.
4. UK and Australia trade
Around 1500 UK companies are doing business in Australia each day. Australia is the UK’s 14th biggest export market, ahead of India, Canada and Russia. The UK’s total exports to Australia were £8.3 billion in 2015. (ONS).
The UK is the second largest investor in Australia with over £300 billion of investment. The UK is Australia’s second biggest FDI investment destination. Australia is now the eight biggest investor in the UK economy.
In 2015-16 Australian investment contributed 97 Foreign Direct Investment (FDI) projects, up 20% on the previous year.
The UK’s biggest goods exports to Australia are cars (£770 million) as well as medicines and pharmaceuticals (£400 million).Travel and tourism (£1.3 billion) and business and professional services are big export revenue earners on the services side.
5. Opportunities for UK businesses in Australia
The Department for International Trade (DIT) provides free international export sales leads from its worldwide network. Search for export opportunities.
5.1 Rail infrastructure
Australia’s rail industry has been changing rapidly as a result of numerous reform initiatives. New South Wales and Victoria are each undertaking their largest public transport infrastructure projects ever, with the Sydney Metro and Melbourne Metro.
British companies are already enjoying success in the Australian rail sector, but there are still significant opportunities available, including:
- service and operations
- design and engineering consulting
- training and education
- environmental planning and geotechnical consulting
- supply chain materials
- remote monitoring and braking systems
- signalling and telecommunications
- maintenance – rolling stock and infrastructure
- tunnelling and drilling specialists
- fire and safety technologies
- financing and PPP Opportunities
Contact Emily.Ramsay@mobile.trade.gov.uk for more information on rail opportunities in Australia.
5.2 Road infrastructure
The states of Victoria, Queensland and New South Wales are investing more than £16.5 billion on highways projects over the next 7 years.
There will be major opportunities for UK businesses in:
Contact Ian.Barnett@mobile.trade.gov.uk for more information about opportunities in road infrastructure.
5.3 Sports stadia and urban renewal
The 2018 Commonwealth Games will be held in the Gold Coast, Queensland.
It will provide opportunities for games infrastructure including:
- passenger rail
- sports village facilities
The Federal Government’s ‘Nation Building programme’ also presents opportunities across Australia in the transformation of both cities and regional areas to meet the demands of a growing population.
Areas of opportunity include:
- residential housing
- health care buildings
- public transport networks
- work to relieve congested road networks
There are also opportunities to support demand for ‘Smart Cities’.
Contact Tracie.Minehan@mobile.trade.gov.uk for more information on sports stadia and urban renewal opportunities in Australia.
5.4 Software and communications
The ‘National Broadband Network’ is the biggest infrastructure project in Australia’s history, costing AUD35.7 billion. The project runs for the next 8 to 10 years and aims to deliver a fast broadband network to 95% of the Australian population.
Most of the opportunities for British companies will become available as the network expands. These opportunities will be in:
- digital entertainment
- e-commerce for mobile
Contact Jim.Thompson@mobile.trade.gov.uk for more information on software and communications opportunities.
5.5 Healthcare and medicines
Australia has an annual healthcare spend of around AUD140 billion. It is the 11th largest globally and highest per capita spend in the Asia Pacific region. It is expected to grow at around 4% per year for the next 5 years.
Opportunities are widely available for UK companies looking to sell quality medical devices, products and services to hospitals. Additionally, with a growing and ageing population and the new National Disability Insurance Scheme there are great opportunities for providers of enabling and assistive technologies.
Australia is the leading location for Biotechnology in Asia Pacific and the fourth largest biotech market in the world.
Opportunities are widely available for British companies looking to market services in drug discovery, development, clinical trials and contract manufacturing. For biotechnology and pharmaceutical companies, there are opportunities to partner with world-leading research institutions.
Spend on pharmaceuticals in Australia is estimated to be AUD14.50 billion with around AUD9.6 billion (around two-thirds) on pharmaceutical imports. The local industry is dominated by the major pharmaceutical groups who all have considerable manufacturing facilities.
There is also a thriving local generics industry.
Medicines are subsidised by the government under the Pharmaceutical Benefits Scheme.
There are opportunities for UK companies with niche products, generics and unique formulations under the special access scheme to enter the market.
Contact Emile.Brys@mobile.trade.gov.uk for more information on health and medicines opportunities.
5.6 Food and drink
There is an increasing appetite in Australia for a range of international, gourmet and specialty food and confectionery products. Thriving ‘international’ sections can be found in the dominant supermarket chains. Specialty retailers are also prospering. Upmarket retailers and distributors have exploited a demand for traditional, ethnic and innovative offers across the whole food spectrum.
There is already a strong UK offering across these areas and opportunities will continue with the ongoing expansion of premium and specialty food offerings.
There are also considerable opportunities for British companies within the Australian drink market.
Opportunities in the non-alcoholic market exist for:
- tea and coffee (successful UK imports but the market is crowded)
- specialty retailers presenting providing non-mainstream offerings with a demonstrable Unique Selling Point (USP)
A segment of the alcoholic beverage market is migrating from quantity to quality and is becoming enthusiastic about premium products. Generally the cost of imported liquor will mean that any product has to find space with specialist retailers within their ‘International’ section. Australians appreciate British alcohol products and there is considerable potential for growth in interesting beverages. These include:
- premium and craft ales and ciders
- unique malts, vodkas, gins and other spirits
Distribution is usually via a specialist importer/ distributor rather than direct with the major supermarket groups.
Contact Joanne.Freeman@mobile.trade.gov.uk for more information about opportunities in food and drink sector.
5.7 Australian retail and e-commerce sector
The Australian retail sector offers exciting opportunities for British companies looking to export. The clothing retailing sector generated a revenue of AUD 19.4 billion in 2015 to 16. Industry revenue is forecast to grow at an annualised rate of 1.5% over the 5 years through 2021 to 22, to AUD 20.6 billion.
Australia’s fashion industry is undergoing a dynamic change with the entrance of several international players. Online shopping is rapidly gaining popularity accompanied with a greater demand for ‘fast fashion’ forcing retailers to forecast and quickly adapt to international fashion trends.
Over the past 5 years e-commerce has grown exponentially as a result of the Australian consumer becoming more confident with online shopping. Clothing, footwear and personal accessories accounted for more than 20% of purchases made online, followed by groceries and liquor.
Competition is anticipated to intensify as participants fight for the consumer dollar. Industry participants will need to develop strong multichannel retailing strategies and position themselves in niche markets to flourish in this increasingly competitive environment.
Contact Venushka.Gammampila@mobile.trade.gov.uk for more information about opportunities in the e-commerce and retail sector.
5.8 Fintech and professional services
Fintech in Australia is in the very early stages of development and ripe for experienced British fintech companies to enter the market.
Australians are early adopters of new technology and there is a growing openness to traditional bank alternatives. Peer to peer lending is growing quickly and there are multiple start-ups operating in the payments sphere, particularly mobile payments. As of yet, no dominant leaders have emerged.
Online apps, software and publishing also present huge opportunities for British financial services innovation. Data analytics and online currency are also areas of potential growth.
More widely there are opportunities for British professional services. Many Australian government departments and businesses are outsourcing their services to specialist firms to refocus on core strengths and cut expenditure. The business and professional services sectors often outsource tasks outside their range of expertise. This includes:
- human resources
- recruitment services
- customer analytics
- accountancy providers
- consultancy (particularly management, project management and engineering)
Contact Odette.Hurle@mobile.trade.gov.uk for more information about opportunities in this area.
5.9 Policing and security
Although still dominated by the government, the defence and security sector in Australia is becoming increasingly connected with the private sector.
Statistics in recent years show a general decline in reported break and enters, robbery and other theft. However, cautious households and businesses are increasingly investing in security and preventative measures. In a climate of heightened global fear of terrorism, increasing internet usage and accompanying cyber-crime, demand for security and investigative services is rising.
Opportunities for UK companies include:
- cooperation with governmental agencies
- high technology expertise
- cyber security
- natural hazard response
- critical buildings resilience technology
- anti-terrorism response capabilities
- medical supplies for Nuclear, Biological and Chemical (NBC) threats and pandemics
- high tech equipment and specialised kit
There is also growing potential for Public-Private Partnerships (PPP) in a variety of areas such as:
- prisons management
- border security surveillance
- mass gathering events security
Contact Export Control Organisation (ECO) to check that your goods meet the legal requirements for export.
Contact Joanne.Freeman@mobile.trade.gov.uk for more information about opportunities in policing and security.
5.10 Offshore Liquid Natural Gas (LNG)
Australia is currently the world’s third largest exporter of LNG. With another seven projects under development, worth over AUD200 billion, Australia is on course to be the world’s largest exporter of LNG by 2018.
Many companies with UK headquarters have offices in Australia and have secured contracts on existing and future projects.
As the focus for the industry moves from construction to operations, opportunities in the LNG sector may be available for companies in:
- operations and maintenance services
- environmental services
- specialised hi-tech equipment
- decommissioning (in the future)
Contact Linda.Miles@mobile.trade.gov.uk for more information on LNG opportunities available in Australia.
Australia is one of the world’s largest mining and resource producers. The Australian resources sector has grown from 5% to 10% of its economy in the last decade and many of Australia’s top 10 exports are all from the resources sector.
Mining investment peaked in 2013 to 14. There will be a significant uplift in mining output over the next few years as projects are completed and start operating.
As the price of iron ore and other minerals has dropped, the focus for mining companies is on saving costs whilst increasing productivity.
Many British companies are already heavily involved in Australia’s mining industry. Opportunities are likely to be most prominent in:
- exploration and analysis
- engineering services
- remote control technology
- construction equipment
Contact Andrew.Beveridge@mobile.trade.gov.uk for more information on the mining opportunities available in Australia.
6. Start-up considerations
A business enterprise in Australia can be operated as a company, a foreign branch, a trust, a joint venture, an individual or a partnership.
The most common forms of operation are:
- establishing an Australian subsidiary by registering as an Australian company
- registering as a foreign company
Taxation and legal obligations differ depending on which business structure you choose. Department for International Trade (DIT) Australia can put you in touch with legal professionals who give advice to British businesses looking to export to Australia.
7. Legal considerations
The federal government of Australia legislates in areas such as trade and commerce, banking, foreign affairs, defence and taxation. Other areas of legislation are dealt with by individual states.
There are 3 major government agencies involved in the regulation of corporations in Australia:
the Australian Securities & Investments Commission (ASIC) administers the national Corporations Act 2001 and enforces company and financial services laws to protect consumers, investors and creditors
the Australian Competition & Consumer Commission (ACCC) administers the national Competition and Consumer Act 2010 and seeks to protect consumers and promote fair trading and competition in trade and commerce
the Australian Prudential Regulation Authority (APRA) regulates prudent management of deposit taking institutions, insurance companies, and larger superannuation funds
The Australian government’s business website contains information on planning, starting and growing your business.
7.1 Standards and technical regulations
Suppliers and manufacturers have an obligation to make sure products are safe. Products must meet relevant safety standards, have clear instructions for proper use and include warnings against possible misuse. If you don’t comply with mandatory standards, you risk action being taken against you under the Trade Practices Act.
The Australian Competition & Consumer Commission (ACCC) enforce mandatory product safety and information standards and bans on unsafe goods declared under the Trade Practices Act. Fair trading offices also have an important role in product safety within their own states.
7.2 Intellectual property
Trademarks, designs, patents and copyright are the principal forms of intellectual property protection available under common law. They are all governed by legislation. The common law also provides protection against a person passing off goods or services as those of another, as well as protection for confidential information or trade secrets.
8. Tax and customs considerations
8.1 Goods and Services Tax (GST)
Goods and Services Tax is a 10% tax on the sale of most goods and services in Australia. Businesses registered for GST will usually include it in the price of sales to their customers.
8.2 Company tax
The company tax rate for an Australian resident company is currently 30% of its taxable income. Following the 2015 budget this has come down to 28.5% for SMEs with annual turnover less than AUD2 million. Taxable income is assessed on the basis of assessable business income less allowable business deductions.
8.3 Individual income tax
Different types of individual income can include:
- salary and wages
- partnership and trust distributions
- company dividends
If you decide to become a resident of Australia you will generally be liable to Australian income tax on income and capital gains earned in Australia and derived throughout the world (although there are a number of exceptions).
There is a double taxation agreement in place that should in most cases prevent any double tax liability from UK and Australian authorities over the same income.
If you’re not a resident of Australia for tax purposes, income earned in Australia is subject to a higher tax regime. In many cases, no personal allowance is offered and tax is levied from the first dollar earned.
The Australian Customs Service regulates all goods imported into Australia. Customs duty and Goods and Services Tax (GST) may apply to goods entering Australia. However, tax rates depend upon a number of factors, including the type of goods and the country of origin. All imported goods must be cleared with customs whether they are imported by air, sea or post.
9. Entry requirements
All visitors must have a valid passport and visa. British citizens can get the following types of electronic visitors visa:
- eVisitor visa direct from the Australian Department of Immigration and Border Protection - no application charge or service fee
- Electronic Travel Authority (ETA) - no application charge but a service fee of AUD20 applies
Anyone who wants to work in Australia needs a work visa.
Check with the Australian Department of Immigration and Border Protection for up to date information on the types of visas available.
9.1 Travel advice
If you’re travelling to Australia for business, check the travel advice beforehand.
Contact the Department for International Trade (DIT) team in Australia for more information and advice on opportunities for doing business in Australia.