HSBC Treasury Management Profiles 2018 -

Current section, Introduction

Introduction

Australia broke world records in the three months to March 2017, when GDP growth of 0.3 per cent marked 26 years of uninterrupted economic growth. High consumer spending, a resurgence in exports as commodity prices improved (exports of minerals and fuels accounted for 43 per cent of exports in 2016, after seeing their share of exports decline in 2014 and 2015) and an increase in government spending contributed to Australia securing this record. The collapse in commodity prices in 2015 saw renewed government efforts to reduce the economy’s dependency on mining. It implemented a number of policies intended to stimulate economic growth, including the National Innovation and Science Agenda, opening up trade and investing AUD50 billion in infrastructure. The Reserve Bank of Australia also kept interest rates low (1.5 per cent in September 2017) to spur the transition to services from mining. Twenty-six years of uninterrupted economic growth affords most Australians a comparatively high standard of living; however, domestically, unemployment levels remain high (5.6 per cent in August 2017), and for those in work, wage growth is at a record low (1.9 per cent). And, while a growing population (Australia’s population grew 1.55 per cent in 2016) is fuelling housing construction, low-interest rates have fueled high property prices and generated substantial mortgage-borrowing; in July 2017, the central bank reported that household debt-to-income ratio had reached a record 190 per cent, and that such high levels of debt made the country’s economy less resilient to future shock.

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Legal and regulatory

  • Foreign exchange accounts and domestic currency (AUD) accounts can be held by residents both domestically and abroad. Resident domestic currency accounts are freely convertible into foreign currency
  • Non-resident bank accounts are permitted in both foreign and domestic currency. Non-resident domestic currency accounts are freely convertible into foreign currency
  • All transactions between residents and non-residents must be reported to the Australian Bureau of Statistics on a quarterly or annual basis for balance of payments purposes

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Taxation

  • Resident companies are taxed on their worldwide income
  • Non-resident companies generally pay taxes on Australian-sourced income only
  • The standard rate of corporation tax is 30 per cent
  • A 10 per cent non-final withholding tax is applied on gross proceeds payable to foreign residents on disposals of taxable Australian property

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Cash management

  • Notional pooling and cash concentration is permitted for resident and non-resident companies. Cross-border notional pooling and cash concentration are permitted. Comprehensive collections services are available

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Payment instruments and systems

  • Electronic credit transfers are used for both high-value corporate and low-value retail payment transactions. Cheque use is in terminal decline. Payment card use, particularly of debit cards, is rising; 82 per cent of cardholders make contactless card payments
  • Australia operates five national payment systems: RITS, an RTGS system; the HVCS, for high-value transfers; the APCS, for paper-based payments; BECS, for credit and debit transfers; and IAC, for POS and ATM transactions
  • In February 2018, a New Payments Platform (NPP) was launched. For low-value retail payments, the NPP offers faster (payments are settled in real time), more convenient ways to pay

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Electronic banking

  • The Australian Bankers’ Association has established bank-independent electronic banking standards. These standards apply to electronic funds transfer at point of sale (EFTPOS) terminals, ATMs, automated telephone banking and internet banking
  • Internet and mobile banking services are provided by all of the country’s banks for both corporate and retail use; over half of all personal banking products in Australia can be applied for using a mobile device
  • As part of the launch of the NPP in February 2018, two services, PayID and Osko, have gone live. PayID enables account holders to link memorable information with the BSB and account number, and Osko is a real-time payment service offered by BPAY

To read the detailed report, please click on the Download PDF option.

 

 


To read the full report on Australia and to discover more on these and other topics, including banking and trade, please click on the Download PDF option.

Sources:

  • Reserve Bank of Australia
  • Australian Bureau of Statistics
  • Australian Trade and Investment Commission

The materials contained on this page were assembled in April 2017 (unless otherwise dated).

 

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