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New Zealand leads Australia in globalisation capability: UHY report
NEW ZEALAND is far better equipped to capitalise on globalisation than Australian business, according to the latest study by international accounting and consultancy network UHY. Australia ranked 15th, with Russia, while New Zealand placed equal third, with the UK and Netherlands, out of 27 leading nations examined.
UHY Haines Norton Australia and New Zealand chairman, David Tomasi said Australia was in danger of slipping even further behind countries on the list if it did not plan for the post resources boom. Australia could, however, take some heart from the survey’s results for competitors Canada, the US and Japan – placed 21st, 25th and 27th, respectively.
UHY’s 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. Significantly, this was well behind New Zealand which scored 6.0, placing it equal third out of the 27 nations studied.
“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,” Mr Tomasi said.
“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 10, while Slovakia was not far behind on 6.3 points. China was the best performing of the world’s top three economies with a score of 4.6, and India was the best-performing BRIC (Brazil, Russia, India, China) 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.
UHY Haines Norton is an association of independent accounting and consulting firms in Australia and New Zealand with 39 Partners, over 280 staff and offices in 10 locations. UHY Haines Norton is a member of UHY, an international network of independent accounting and consulting firms with offices in over 270 major business centres in 86 countries.
UHY GLOBALISATION READINESS SURVEY
Rankings show 27 countries’ ability to take advantage of future globalisation of trade, with marks out of a possible 10.
1 Germany 6.4 15 Russia 4.7
2 Slovakia 6.3 15 Australia 4.7
3 Netherlands 6.0 17 China 4.6
3 New Zealand 6.0 17 Uruguay 4.6
3 United Kingdom 6.0 17 Spain 4.6
6 Denmark 5.4 20 Mexico 4.4
7 France 5.3 21 Canada 4.3
8 Czech Republic 5.1 21 Austria 4.3
8 India 5.1 23 Israel 4.1
8 Croatia 5.1 24 Nigeria 4.0
8 UAE 5.1 25 Italy 3.7
12 Romania 5.0 25 United States 3.7
12 Brazil 5.0 27 Japan 3.0
12 Ireland 5.0
Note: Countries’ overall scores are based on their rankings for the detailed measures included in the study. Data drawn from: the World Bank, World Trade Organisation, International Labour Organisation and national governments.
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