Data from the Australian Bureau of Statistics, released on August 31, showed that Australian GDP increased 0.7% in the second quarter compared to the first three months of the year, slowing from the quarter-over-quarter growth of the year. 1.9% in the January-March period. However, the figure exceeded forecasts by 0.5%.
In annual terms, second quarter GDP growth was the fastest in modern history, standing at 9.6%. However, the data refers to the contraction that took place in the April-June quarter of 2020, when the country was facing the first consequences of the coronavirus pandemic.
The Australian economy was already slowing in the April-June 2021 quarter, before the Canberra government took various isolation measures to stem the coronavirus. According to Reuters, the strict containment rules imposed in Sydney, Melbourne and Canberra are set to see the economy shrink by 2-3% in the current quarter.
The Reserve Bank of Australia (RBA) was counting on a quick recovery once restrictions were relaxed. The central bank is now under pressure to delay the tightening of its bond purchase program scheduled for August 2021 and is not expected to raise interest rates from all-time lows of 0.1% until at least 2023.
Main sectors of industry
The Australian industrial sector and its manufacturing structure has seen significant developments in the tertiary and research sectors; however the primary sector, that is the agricultural sector, despite the not excessive extension of the cultivated areas, gives rise to considerable export flows, contributing to the economy of the country and of the various industries linked to agricultural production. As far as wheat is concerned, Australia is among the world’s largest exporters and the same must be said for the industry linked to the breeding of sheep and cattle. There are many farms scattered throughout the territory that also offer job opportunities to many young people. Now, the agricultural industry obviously also benefits from the use of modern machinery with an important impact also on the industry that produces these machinery.
In recent years, the mining industry has also seen significant growth with a rich and diversified production ranging from aluminum to zinc, from uranium to gold. Australia is at the forefront of coal and natural gas production.
the most active industries are textiles and paper processing, while the services sector is the one that has perhaps recorded the greatest growth, particularly in the financial and real estate sectors. But the greatest real growth rates were recorded in the telecommunications and technology research sectors.
Taxation for businesses In Australia
Worldwide source income from resident companies is taxed in Australia. Non-resident companies, on the other hand, are subject to taxation only on income produced in the area through a permanent establishment. Generally speaking, a company is resident if it is incorporated in Australia.
However, companies are also considered fiscally resident in Australia, which although established abroad, carry out their business activities in Australia. In this sense, the place where the decisions taken by the directors are taken is essential.
Furthermore, the Australian tax law includes in the group of resident persons foreign companies which act in Australia and whose majority share capital is held by persons resident there.
The taxable income of a company is determined using the same principles seen for business income produced by individuals.
However, unlike individuals, subject to a progressive tax rate system structured on income brackets, companies suffer a flat rate of 30%. Again, the tax period begins on 1 July and ends on 30 June of the following year.
Investing in Australia
In 2018, Australia was the first destination in the world for the number of “millionaire migrants”.
Thanks above all to the numerous advantages offered to foreign investors, who – very willingly – move their economic investments towards the third country in the world that is freer economically, or “the fundamental right of every human being to control his own work and individual property” (source heritage.org).
Australia is the only developed country in the world where, over the past 20 years, GDP has grown continuously. Bringing positive effects also in commercial relations with other states.
The same goes for the start-up sector, which literally exploded down under, thanks – above all – to a thriving and innovative corporate ecosystem.
Its strategic position in the Asia – Pacific market, government stability and the presence of numerous technological and innovative infrastructures, as well as its multicultural root that allows it to expand micro and macro economies in & out, make – currently – Australia the best country to the world where to invest.