UK-Australia Trade Deal Will Unleash New Opportunities
Robert Lissauer, director of taxation and international business at Melbourne-based accounting firm Hall Chadwick, gave an upbeat initial assessment of the Free Trade Agreement (FTA) and said north west companies were likely to be among the biggest beneficiaries.
He said the FTA would enhance the already warm trading relationship between the two countries and generate a range of benefits, such as greater mobility of labour, which will help address shortages in both countries.
“It provides opportunities, there is no doubt. It’s going to elevate trade between the countries. Just in terms of mobility of labour it’s significant – a tremendous benefit which we will all be able to harness.”
He was the keynote speaker at a Doing Business in Australia event which took place on Zoom soon after the FTA was confirmed.
There is renewed interest in international markets beyond the EU in the aftermath of Brexit, and Australia is a strong magnet for UK business as a standalone market and as a gateway to the wider Asia-Pacific region.
Robert said Australia has a population of 26 million compared with 68 million in Britain, but it is significantly stronger economically than its demographic suggests.
It is the 12th largest economy in the world, and trading in goods and services between the UK and Australia totalled $36.7bn in 2020. Between 13,000 and 14,000 SMEs in Britain currently trade with Australia and the figure is growing, he said.
Australia is also a very strong jump-off point for the APAC (Asia-Pacific) region, said Robert.
Its population includes a significant number of people of Chinese background, which makes it easier for UK companies to recruit staff in Australia who can interact effectively with the APAC region.
Furthermore, with figures suggesting that by 2050 two-thirds of global production and consumption will take place within APAC, this will have a ‘huge business impact’ and make it vital for companies to have a presence in the region to exploit the trend in positive ways, he added.
Robert said that, for a number of geopolitical reasons, there is a growing sense of dissatisfaction about the world’s reliance on China, and alternative supply lines within APAC are being sought. Vietnam is one example of a key destination in the spotlight. Australia’s strong ties with Asia make it attractive for business in this context too, he said.
Robert also explained that Australians have a reputation as early adopters of products, clothing and technology, and that despite the challenges of pandemic the country has fared much better than anticipated.
These factors have helped spawn a range of strong growth sectors, especially healthcare and health tech, e-commerce, transport, education, professional, technical and scientific services and defence.
There are ‘very strong positives’ for exporters to Australia of, for example, pharmaceuticals and medicines, clothing, drinks and motor vehicles, said Robert.
He added that, for UK firms, Australia is an easy place in which to conduct business, with a familiar legal system.
Addressing companies considering establishing operations Down Under, he discussed the federal income tax (which has a tax rate of 26-30pc), appropriate company structures such as subsidiary or branch operations, the need for an in-country director, the movement of profits, and cross-border pricing policies.
He also touched on Australia’s highly-regulated economy, encompassing anti-money laundering, counter-terrorism legislation and the taxation system.
Robert urged entrepreneurs to visit Australia when it is possible to do so, to meet clients and see what competitors are doing.
Giving a UK perspective, HURST international tax partner Adrian Young said that working in Australia was a well-trodden path and was something that British firms should embrace. There are some differences in terms of aspects such as tax and investment, but they are not that large nor insurmountable, he said.