Executive Guide to Doing Business in Australia

Overview of Australia
Major cities
Population growth
Age structure
Life expectancy
Gross Domestic Product
Income per capita
Biggest imports/exports
Major trading partners
Health expenditures per capita
Medical device market size
Government expenditure on healthcare
Private expenditure on healthcare
Out-of-pocket expenditures
Physicians & hospital beds per 1,000 people
Doing business with Australia
Documents needed to import
Time to import into the Australia
Burden of customs procedure
Logistics performance index
Enforcement of contracts
Exchange rate history
Total tax rate

Overview of Australia

Capital: Canberra
Language: English (de facto)
Currency: Australian dollar
Population: 23.2 million (2013 est.)

Officially known as Commonwealth of Australia, the country of Australia is comprised of the Australian continent, the island of Tasmania and several other small islands. This makes it the sixth-largest country worldwide by total area, but one of the sparsest populated, with a highly urbanized population of 23.1 million. With stable democratic political system, Australia is one of the most developed countries with the 12th largest economy worldwide, making it the one of the wealthiest nations. It ranks highly in terms of quality of life, health, economic freedom and civil liberties, having the second-highest human development index globally, behind Norway. [1]

Major cities in Australia

Sydney – 4.6
Melbourne – 4.2
Brisbane - 2.1
Perth – 1.8
Adelaide – 1.2

Australia’s population has grown considerably due to several waves of immigration that happened following the end of the Second World War. It is one of the most sparsely populated countries, 2 people per square kilometer, and one of the most urbanized countries, 89% of its population living in urban areas. Australia has 19 cities of 100,000 people or more, with around 40% of the population living in either Melbourne or Sydney. [2]

Population growth in Australia

According to official figures from the Australian government, the country has one of the highest population growth rates among OECD countries. An influx of 10 million immigrants over the course of the next 50 years would increase Australia’s population to 40 million by 2060 and 50 million by 2100, estimates the country’s Bureau of Statistics. [3] [4]

Australia population growth

Age 0-14 - 19%
Age 15-64 - 67%
Age 65+ - 14%
Median age - 37

Age structure in Australia

Due to increasing life expectancy and sustained low fertility, the average age has increased by almost 5 years over the last two decades. The median age in Australia is expected to increase from 37 to 41 in 2060 and 53 in 2100. The percentage of people aged 15 to 64 in Australia (15 to 64 years) is roughly the same as in the USA (67%) or Brazil (68%). The percentage is also slightly higher than Germany’s, with 66%, and France’s (64%). [5]

Australia age structure

Male/female: 80/84
Globally: 68/71

Life expectancy in Australia

Australia has the fourth highest life expectancy in the world, behind Iceland, Japan and Hong Kong and the third highest female life expectancy, following Japan and Hong Kong. These numbers have been steadily increasing since the 1980s, when Australian males were expected to live 71 years and females 78 years. Presently, the life expectancy for Australians is 80, respectively 84 years. [6]

Australia life expectancy

US$ 1,542 trillion (ranked 12th)

Australia's Gross Domestic Product

2012 marked for Australia 20 years of continued economic growth, at an average rate of 3.5% a year. Australia’s GDP grew by 285% from 2002 to 2012 after taking a slight dip in 2009 due to the global economic crisis. According to data from the World Bank, Australia had the 12th largest GDP in the world, before Mexico or South Korea but behind China, Japan or Brazil. [7]

Australia GDP

Income per capita in Australia

US$ 67,036 (ranked 7th)

Australia had the 7th highest GDP per capita in 2012, overtaking USA, Canada and Singapore but falling behind Switzerland or Norway. This has been growing at a rate of 1,9% annually over the past 40 years until 2010, a rate which is estimated by the Australian Treasury to drop to 1.5%, due to the growing percentage of seniors. [8]

Australia GDP per capita

Biggest imports/exports in Australia

Australia’s most imported goods in 2012 were iron ore, coal, gold, natural gas and crude petroleum, while the most exported were crude & refined petroleum, motor vehicles, telecom equipment and medicine. According to the Medical Technology Association of Australia, nearly all medical devices made in the country are exported, while those used within the country are imported. Most of the exports (75%) go to New Zealand, while Europe is the main source of export revenue; the main countries from which companies import are USA (74%), Europe (61%) and UK (28%). [9] [10]

Imports come from:
China – 18.2%
United States – 11.6%
Japan – 7.8%
Exports go to:
China – 29.5%
Japan – 19.3%
South Korea – 8%

Major trading partners for Australia

Australia is considered to be an open market, thus it poses minimal restrictions on importing goods. Currently, Australia has several free trade agreements (FTA) in force with New Zealand & the ASEAN countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand, Brunei, Burma, Cambodia, Laos, and Vietnam), Chile, the United States, Malaysia, Singapore and Thailand. An FTA has been concluded with South Korea but is not yet in force and FTAs are being negotiated with China, the Gulf Cooperation Council, India, Japan and Indonesia. Other FTAs in talks are the Pacific Agreement on Closer Economic Relations, between New Zealand and 13 other Pacific countries; the Regional Comprehensive Economic Partnership, between 10 ASEAN countries, Australia, China, India, Japan, Republic of Korea and New Zealand; the Trans-Pacific Partnership Agreement between Brunei Darussalam, Chile, New Zealand, Singapore as well as Canada, Japan, Malaysia, Mexico, Peru, the USA and Vietnam. [11]

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Healthcare in Australia

Universal healthcare in Australia is provided through Medicare, a program that covers most of the healthcare costs for its citizens. This is funded through a 1.5% tax on incomes above a certain threshold and an extra 1% levy on those earning a high income. Medicare program coexists with a private insurance system, which covers services such as dental care or private hospitals for roughly half of Australians. Private insurance is provided through organizations called health funds, the biggest being the government-owned Medibank, which has a 30% market share. The Australian healthcare market is the 12th largest globally, allocating 9.4% of its GDP to healthcare spending. [12]

US$ 140 billion (2011)
Health spending per person:
US$ 5,939
Growth from 2006 to 2011: +78%
Total health expenditure on health as % of GDP: 9%

Health expenditure per capita

Health care spending per capita in Australia has grown by 263% from 2001 to 2011, making it the 8th highest in the world, behind the USA, Switzerland or the Netherlands. The cost is expected to increase even further as the number of people over 65 years will double by 2050. Compared to the Asia Pacific countries, Australia spends the most per capita and has the fifth biggest share of regional healthcare spending, following China, Japan, India and South Korea. [13]

health expenditure capita Australia

Government expenditure on healthcare

55.89% of healthcare costs are paid for by the government, a share that has been steadily increasing from 35.57% in 2001. Government expenditure on healthcare in Australia is above that of the USA, Brazil or Mexico and below countries such as Japan or Canada. [14]

general expenditure health Australia

Private expenditure on healthcare

The remaining 31.49% of healthcare costs are covered by private sources. Half of Australians have opted for a form of private insurance that cover services such as dentistry, private hospitals or optometry. This has attracted members in part due to generous premium subsidies and financial penalties applied to high earners that choose not to subscribe to a paid insurance plan.

private expenditure health Australia

Out-of-pocket expenditures

In 2011-2012, Australians contribute with a total of $24.8 billion in out-of-pocket expenses to healthcare costs, translating into an amount of $1,101 per capita. This represents 62.97% of private health care costs, a higher percentage than USA, Brazil and Canada but lower than Mexico or Japan. [15]

out of pocket expenditure health Australia

US$ 11.7 billion (2010)
Number of hospitals: 1,340
Growth Potential: 2 (1 - low; 5 - high)

The size of the Australian medical device market

Australia is the fourth largest market by revenue in the Asia Pacific region, following Japan, China, and South Korea, that benefits from a sophisticated environment, high standards of care and a highly skilled work force. There are more than 500 medical device companies in Australia, concentrated in the East coast, in cities such as Sydney, Melbourne and Brisbane. Around 60% of these companies employ less than 20 people, while 10% have more than 100 employees; in total it is estimated that around 19,000 people work in the industry. The industry’s annual growth rate is estimated at 4% for 2012, down from 9.5% in 2009. [16] [17]

Physicians & hospital beds per 1,000 people

There are 3.8 physicians and 9.5 nurses available for every 1,000 people in Australia. The number of doctors is one of the highest among countries in the Asia Pacific & North America regions, as well as more physicians than the EU average (3.3 for every 1,000 people). [18]

physicians Australia

In terms of hospital beds, Australia had 3.0 beds available for every 1,000 people, a number below the European Union average of 5.8 and that of the USA, with 3 hospital beds.

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Doing business in Australia

Doing business in Australia

Australia is the 13th largest economy globally by nominal GDP, representing around 1.7% of the world economy. A member of the G20 group, OECD and World Trade Organization, the country benefited from continuous economic growth for the past 20 years at an yearly average of 3.5%. The Global Competitiveness Report ranks Australia 20th out of 148 economies surveyed behind the USA, Singapore and Japan, the most problematic factors cited being restrictive labor regulations, government bureaucracy and tax rates. Doing Business puts Australia on the 11th position by how easy it is to do business, behind New Zealand or the USA but ahead of Canada and Japan. [19] [20]

ease of doing business Australia

Documents Needed to Import

7 documents are required to import goods into Australia, 3 more than the OECD high income countries average. The number is above the USA average and the EU, which both require 5 types of documents to import. [21]

  • Bill of Lading
  • Commercial invoice
  • Customs import declaration
  • Packing declaration
  • Packing list
  • Release order
  • Technical standard/health certificate

documents to import Australia

Time to import into Australia

It takes 8 days to import goods into Australia, less than in Japan (11 days) and the OECD high income average (10), but more than in countries such as USA (5 days) or Hong Kong (5). This number has remained unchanged for the past years and is estimated to stay the same throughout 2014.

time to import Australia

Burden of customs procedure

Most of medical devices or therapeutic goods must be registered with the Australian Register of Therapeutic Goods (ARTG) before being imported into Australia. All imported goods are assessed for duty, a duty which is determined by the tariff classification of the goods. The Goods and Services Tax (GST) payable for most products is around 10%. [22] [23]

Logistics Performance Index – 3.73

The Logistics Performance Index (LPI) is the average score for a country reflected by the efficiency of custom procedures, trade and transport related infrastructure, ease of arranging competitively priced shipments, quality of logistics services, ability to track and trace consignments and timeliness of shipments in reaching their destination. Australia has an LPI of 3.73 and is ranked 18th, behind Germany, the USA, Canada, Japan or Germany. [24]
1 = Low; 5 = High

Enforcement of Contracts

Australia ranks 14thon the ease of enforcing contracts, out of 189 countries surveyed. This puts it slightly behind USA, ranked 11th, and ahead New Zealand, Canada or Japan. Enforcing a contract in Australia takes 395 days, costs 21.8% of the claim and involves 28 procedures.

Australia enforcement contracts

Exchange rate history

For a detailed overview on how the the Australian dollar has moved in recent years, please see the graphic below. [25]

Total tax rate (% of commercial profits)

An Australian company pays 47% of its profit to tax authorities every year. This is made through 11 tax payments that require 105 hours of filling. This numbers put Australia in the 44th position in terms of the ease of paying taxes, outranking the USA or Japan, but behind Canada or New Zealand.

Australia tax rate

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Data compiled December 2013. Updated yearly

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