Posted: March 23rd, 2023
Political Stability in Australia Encourages Business Operations
The System of governance in Australia is anchored on the liberal democracy that entails freedom of speech and association as well as religious tolerance. The types of government in Australia reflect the practices and institutions in North America and Britain models of governance. However, the models are uniquely based on reflecting the needs of the Australian people. The constitution of Australia stipulates the responsibilities and rules of the government and indicates the power of the three arms, including the executive, judicial, and the legislative. The country is politically stable, peaceful, and prosperous nation (Hellenistic-Australia Business Council, 2016). In fact, the legislation for the government territory exists more so to protect the consumers, community, and the environment, as well as to encourage fair trading and competition.
Therefore, the political system in Australia is conducive for businesses because the country has well-regulated and transparent business environments. The political stability has provided the country with a high reputation considering the economic freedom. In fact, Australia is ranked among the top five global nations on the economic freedom index, a situation that has been encouraged by political stability. According to The Economist Intelligence Unit (2016), Australia is ranked the highest in the world for political stability, a situation that has encouraged the ease of doing business with considerable support from the government and low levels of corruption.
The Conducive Regulatory System Enhances Business Operation in Australia
The regulatory framework in the country inspires confidence and security to the investors. The laws usually oversee the how the businesses interact with consumers, suppliers, as well as other businesses. The laws also outline the rights of the business owners and the businesses should there be any conflict. For instance, the national statutory framework in the Australia ensures that there is fairness in trade between consumers and businesses. Therefore, every business can operate within favorable confines of law without undue restriction and on the other hand being fair to the consumers. In addition, the country established territory and state laws that govern the consumer protection. In this aspect, there are offices in each territory or state that offers advice on pertinent issues regarding obligations and business rights. In fact, this initiative is another legal system that has created a favorable environment for doing business in Australia. In this case, there are fair trading laws for both the consumers and the business that create a competitive environment for business owners.
Another regulatory system includes the consumer laws, which provide regulation on product safety laws, consumer right guarantees, unfair contract terms, unsolicited agreements for consumers, and lay-by agreements, as well as penalties attached. In this aspect, all the guidelines stipulated provides a clear system that businesses are expected to follow, therefore, doing business becomes easy as far as the business owner can follow them. The regulatory system through product liability regulation creates a fair playing ground by ensuring that the counterfeit and cheap goods do not find their way in the Australian market. The standards set by the regulator ensure that harmful products are not marketed in the country, and the product safety guidelines are enforced.
The Impact of Corruption on Business in Australia
It is important to indicate the impact the corruption have on the Australian businesses or to the general public. Australia is ranked as ninth in the least corrupt countries in the world. The most crucial financial incentive that would minimize corruption is to reduce the reputation risk, especially in the private sector. When there is a strong reputation just as in Australia, it means that the cost of doing business is low because the cost of capital is low and there is ease in accessing the international markets Fox, Jacqueline (2014). High levels of corruption affect the employees’ morale, organization share price, and business relations. When levels of corruption are minimized, the government resources are augmented, and greater investment is encouraged, especially in the business sector. Just like in many countries, it is difficult to measure the levels of corruption in Australia and its impact towards doing business in the country. Therefore, many reports are founded on the perceptions as opposed to absolute measures (Transparency International, 2014).
The perception surveys carried out in Australia are regarded as the most reliable approaches for comparative analysis of the corruption internationally. Although the level of corruption is low, PWC (2014), avers that the level of corruption has risen, and Australia continues to trade with countries that are more corrupt than itself. Therefore, the ease of doing business might as well be affected by this small level of corruption. For instance, there are reliable regulation institutions for fighting and identifying corruption and bribery cases. However, the conviction rate is very low OECD (2012). Therefore, doing business will be compromised since it is still hard to increase transparency in awarding contracts to the public sector. Although corruption is not a big obstacle to the business in the Australia, the vice continues to impact on the new businesses because the same few corrupt companies continue to benefit from proceeds of corruption since they are not prosecuted. In essence, new opportunities for business ventures are compromised, and new business entrants are also restricted.
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