NZ leads Australia in globalisation ready race
New Zealand is far more equipped to capitalise on globalisation than Australian business according to a new study published in Australia today by UHY, the international accounting and consultancy network (see page 2).
UHY taxation and business advisory professionals in 27 countries rated their economies on several factors including taxation and trade policy, how internationalised an economy already is and how well positioned it is to take advantage of future globalisation of trade.
The factors examined in UHY’s study included; how successful a country has been in negotiating favourable tax arrangements with potential trading partners, how successful it has been in growing exports, how important a part trade already plays in its economy, how much tax it imposes on companies ‘repatriating’ overseas profits, how it is rated in the World Bank’s ‘Ease of Doing Business’ survey and labour costs.
Assessed on these factors, Australia scored 4.7 out of a maximum of 10, placing equal 15th with Russia, well behind New Zealand which scored 6.0 placing it equal third out of the 27 nations studied.
UHY Haines Norton Australia and New Zealand Chairman, David Tomasi said that Australia is in danger of slipping even further behind countries on the list if we don’t plan for the post resources boom.
“Australia needs to improve its standing dramatically if it hopes to compete on a more level playing field with many of the countries listed in the study.” Mr Tomasi said.
“Whilst the recent correction to the Australian dollar helps to make our exports more competitive, our manufacturing industry has been decimated over the past decade or so. A lot needs to be done to improve this and put Australia in a position where it gets maximum benefit from globalisation.”
“An adjustment of our high labour costs is not realistically achievable in the medium term. If Australia wants to improve our attractiveness to international businesses looking to establish operations in our region we need to work on other factors to counter it.
“One area in particular is to improve productivity and another is to continue to develop and encourage high value specialist industries. An adjustment to government attitudes and policies is also needed if we are to achieve any of these.” Mr Tomasi said.
Germany topped the ratings with a score of 6.4 out of ten, while Slovakia was not far behind on 6.3 points. China was the best performing of the world’s top 3 economies with a score of 4.6, and India was the best-performing BRIC with a score of 5.1, helped by its low labour costs with an average monthly salary less than half as high as China’s.
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