Country Forecast Australia April 2018

Country Forecast Australia April 2018

  • April 2018 •
  • Report ID: 470397 •
  • Format: PDF

Policy towards private enterprise and competition


2018-19: Competition laws continue to be enforced strongly, slowing consolidation of ownership in some sectors. The federal government privatises the visa processing system.


2020-22: Cash-strapped state governments continue to sell or lease assets, channelling the funds into infrastructure projects.


Policy towards foreign investment


2018-19: Asset acquisitions by foreign state-owned investors continue to face a high degree of scrutiny, with those deemed contrary to the national interest being rejected. Investments from China, in particular, face growing opposition.


2020-22: Restrictions are maintained on foreign investment in "sensitive" sectors, such as banking, agriculture and the media. Review thresholds are increased for some countries as free-trade agreements (FTAs) are signed and come into force.


Foreign trade and exchange controls


2018-19: With other countries, Australia ratifies the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which will come into force in 2019. The government concludes a proposed FTA with Indonesia.


2020-22: An FTA with the EU is concluded, followed soon after by one with the UK. Benefits from the CPTPP start to trickle down.


Taxes


2018-19: The corporate tax rate for companies with turnover of up to A$50m (US$38m) falls to 27.5%. The government struggles to get budgeted tax cuts for larger firms across the line in the Senate (the upper house of parliament). Possible cuts to personal income tax.


2020-22: A Labor Party government moves to increase taxes on capital gains, and to clamp down on both cash refunds for shareholders with excess franking credits and negative-gearing (whereby losses on investment property can be used to offset individual tax liabilities).


Financing


2018-19: The banking royal commission issues its final report and recommendations on tighter regulations for the financial sector. Funding from domestic and foreign sources remains cheap by historical standards, and firms generally continue to enjoy good access to medium-term finance.


2020-22: Access to credit becomes tougher as interest rates increase and banks become more concerned about bad debt.


The labour market


2018-19: Immigration rules for temporary skilled migrants are overhauled, with a tighter focus on filling skills shortages. Wage growth is still subdued. Phased reductions in the Sunday penalty rates for workers continue.


2020-22: Immigration policy is increasingly targeted towards attracting highly trained migrants to plug specific skills gaps. More emphasis is placed on lifting productivity by improving the skills base, especially in schools.


Infrastructure


2018-19: State governments invest in new infrastructure. Energy security comes under greater scrutiny. The roll-out of the National Broadband Network proceeds, but high cost of faster internet packages constrains take-up.


2020-22: Work continues on the A$2bn expansion of the Snowy Mountains Hydroelectric Scheme, the Melbourne to Brisbane Inland Rail, and the new Western Sydney Airport.


Technological readiness


2018-19: Formal standards for the first phase of fifth-generation (5G) broadband are put in place, and 5G trials begin.


2020-22: Progress is expected on the government's Smart Cities Plan, which aims to promote smart investment and the adoption of smart technology in metropolitan and regional cities. Deployment of the Internet of Things gathers pace.



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