Guidance

Overseas business risk: Australia

Updated 24 February 2021

Australia has been among the best-performing advanced economies in recent decades and weathered the COVID-19 pandemic comparatively well. Political stability and a transparent regulatory system, combined with strong cultural and institutional ties mean Australia remains an excellent place for British companies to do business – it is our 15th largest export market and we are its second largest foreign investor.

1. Political and Economic

1.1 Political Overview

Australia is a parliamentary democracy and a constitutional monarchy. Its system of government is inherited from the UK model, reflecting a shared cultural heritage. The Australian Constitution of 1901 established a federation and defined the responsibilities of the federal government (the Commonwealth). The six states retain power over matters not assigned to the Commonwealth, while the two mainland territories – the Northern Territory and the Australian Capital Territory – have been granted the right of self-government. The legislative power of the Commonwealth is given to the Parliament, which consists of the Queen (represented by the Governor-General) and two Houses: the Senate and the House of Representatives.

The Australian federal election held on 18 May 2019 saw the centre-right governing Liberal-National coalition, led by Prime Minister Scott Morrison, returned for a third term. The coalition currently holds 76 seats in the 151-seat House of Representatives. Barnaby Joyce is the Deputy Prime Minister and leader of the National Party. The Federal Opposition, the Labor Party, is led by Anthony Albanese.

Members of the House of Representatives serve three-year terms, while senators serve fixed six-year terms. It is standard practice to hold a full House of Representatives and a half-Senate election simultaneously every three years, the next opportunity being no later than 21 May 2022. Australian laws and regulatory practices can vary between the states and territories, so businesses looking to operate across jurisdictions should check the relevant and applicable regulations. Find out more about how the Australian system of government works on the official Australian Government website.

1.2 Economic Overview

Australia’s economy has remained resilient during the pandemic, having not recorded a recession for 29 years since the early 1990s. This success reflects many factors, including sound fiscal management, strong population growth, an abundance of natural resources (particularly iron ore, coal, gold and gas) and close ties to fast-growing Asian markets.

Below-trend economic growth in recent years, coinciding with the transition from the mining investment boom, prompted renewed calls for productivity-enhancing reforms to drive future growth. However, this was overshadowed by the fiscal and monetary response during the pandemic, as the government prioritised supporting domestic households and businesses, and securing Australia’s economic recovery.

1.3 Trade and Investment Overview

Australia’s trade and investment profile is increasingly tied to Asia, with over three-quarters of its exports destined for the region. The country’s biggest two-way trading partner is China, followed by the United States, Japan, the Republic of Korea, and the UK. Australia’s top exports in 2020 included iron ore, coal, natural gas, education services and gold, while passenger motor vehicles, refined petroleum , telecom equipment, freight services and computers featured among the top imports. Education and tourism exports should gradually pick up after Australia’s international border reopened from 21 February 2022. Tensions with China since 2020 have curtailed Chinese demand for some Australian commodity exports.

Internationally, Australia presents itself as a strong proponent of trade liberalisation, both multilaterally and at the regional and bilateral level. It has 16 free trade agreements currently in force, including bilateral agreements with Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia New Zealand, Peru, Singapore, Thailand and the United States, as well as the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the Pacific Agreement on Closer Economic Relations (PACER) Plus, and the Regional Comprehensive Economic Partnership (RCEP). The UK signed a trade agreement with Australia in December 2021 which will enter into force once domestic procedures have been completed.

Trade and investment between the UK and Australia remains strong. The UK is Australia’s tenth-largest source of goods imports and second-largest source of services imports. In 2020, UK exports to Australia were valued at £9.3 billion. Top UK goods exports to Australia include medicinal and pharmaceutical products, cars and other consumer manufactures. In the same year, Australian exports to the UK were valued at £4.9 billion. Top goods exports from Australia include gold, non-ferrous metals and beverages. Services typically account for up to half of the value of UK-Australia trade, led by business services, insurance and pension services, and financial services.

The UK is the second-largest source of foreign investment in Australia and the second-largest destination for Australian foreign investment. Under Australia’s foreign investment framework, foreign investment proposals are reviewed against the national interest on a case-by-case basis. Foreign investors should familiarise themselves with the framework and ensure they comply with Australia’s legislative and regulatory requirements.

2. Human Rights and Business

The Australian government has acknowledged the importance of promoting and protecting human rights standards by ratifying a number of international instruments including the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, as well as conventions on anti-discrimination and international labour standards. The Australian government encourages businesses to apply the United Nations Guiding Principles on Business and Human Rights, including the corporate responsibility to respect human rights.

All Australian employers are required to create a workplace that is free from discrimination and harassment. The Australian Human Rights Commission provides more information for employers.

The Fair Work Commission is the national workplace relations tribunal. It is an independent body providing a safety net of minimum conditions, including minimum wages and working ages, as well as a mechanism for resolving a range of collective and individual workplace disputes. Workers’ rights extend to freedom of association in terms of the right to form trade unions. For industrial action to be lawful in Australia it must be protected industrial action and can take a variety of forms, including employee strikes.

The Native Title Act 1993 recognised the land rights of Australia’s indigenous population. British businesses and developers involved in land transactions where Native Title applies must respect the rights of traditional landowners and custodians to negotiate agreements for development proposals. Read more on the website of the National Native Title Tribunal.

Australia is a member of the Voluntary Principles on Security and Human Rights (VPs), a multi-stakeholder initiative involving governments, companies, and non-governmental organisations that promotes implementation of a set of principles that guide oil, gas, and mining companies on providing security for their operations in a manner that respects human rights.

Australia is also a Member State of the International Code of Conduct for Private Security Service Providers (ICoC) Association, a multi-stakeholder initiative working with private security companies to set out international principles and standards for the responsible provision of private security services, particularly in complex environments.

The Modern Slavery Act 2018 requires large companies and other entities to report annually on their modern slavery risks within their supply chains. Standalone laws against modern slavery have also come into effect in New South Wales.

3. Bribery and Corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

The UK and Australia are ranked equal 11th on Transparency International’s Corruption Perceptions Index for 2020.

Read the information provided on our Anti-bribery policy page.

4. Terrorism Threat

Please refer to the information provided in the Terrorism threat of the Foreign, Commonwealth & Development Office travel advice for Australia.

5. Protective Security Advice

Like in any country it is important to take precautions for individual and business security when doing business in Australia. However, on the whole the threat in Australia is no greater than in the UK.

Read the information provided on our Protective security advice page.

6. Organised Crime

As in many other major countries, international organised criminal activity takes place in parts of Australia, in particular linked to drugs, people smuggling and people trafficking.

Read the information provided on our Organised crime page.

7. Intellectual Property (IP)

Intellectual property protection is an important consideration for UK businesses looking to do business in Australia and standards can differ from that in the UK. Under common law the principal forms of intellectual property protection available in Australia are trade-marks, designs, patents, plant breeder’s rights and copyright. All of these forms of protection are governed by legislation. The common law also provides remedies against a person passing off goods or services as those of another, as well as protection for confidential information or trade secrets.

Australia is a party to the World Trade Organization’s Agreement of Trade-Related Aspects of Intellectual Property Rights, and a signatory to multilateral treaties administered by the World Intellectual Property Organization. Find out more about Intellectual Property and other ways of protecting your business in Australia from the Australian Trade and Investment Commission and the IP Australia website.

Read the information provided on our Intellectual Property page.

8. UK Export Finance

The government can provide finance or credit insurance specifically to support UK exports through UK Export Finance – the UK’s export credit agency. For up-to-date country-specific information on the support available see UK Export Finance’s cover policy and indicators for Australia.

9. Contact

Contact the UK’s Department for Business and Trade team in Australia for further information.

10. Useful Links

For more information about exporting to Australia, or doing business there, read the Department for Business and Trade’s Exporting to Australia guide.