World Bank rates Australia number nine for ease of business
The Age
Thursday September 10, 2009
AUSTRALIA'S labour market laws have been ranked by the World Bank as a global leader in business-friendly regulation €” despite the Rudd Government's recent reforms to improve workers' rights.The bank's annual survey of business regulation around the world, Doing Business 2010, maintains Australia's ranking as the ninth-easiest country in the world in which to run a business.The ranking is based on 10 measures, including the ease of starting a business, getting construction permits, transferring property, getting credit and enforcing contracts.Singapore, as usual, was ranked the easiest country in which to do business, followed by New Zealand, Hong Kong, the US, Britain and Denmark. The Central African Republic was rated the worst of the 183 countries for doing business.Laos (167) and East Timor (164) were the worst in Asia, and Greece (109) and Italy (78) the worst among rich countries.Australia shared top ranking with Singapore and the US for labour market regulation, as judged by the ease of hiring and firing, flexibility in working hours and the cost of making workers redundant €” which the report says ranges up to an average payout of almost nine years' wages in Zimbabwe.The report says its criterion is that laws should encourage job hiring, but they should also provide an adequate safety net to prevent workers slipping into poverty. It endorses the right to collective bargaining, a central feature of Australia's recent reforms.Australia was ranked the third-easiest place in which to set up a business, with only two formal procedures required. Getting credit is also easy here (fourth in the world). But after that it gets harder.Australia ranks only 16th for the ease of enforcing contracts, 27th for the ease of exporting and importing, and 34th easiest to do property transfers, partly due to stamp duties.The report ranks Australia just 47th for the ease of paying taxes, partly because it estimates the total tax take on business at a surprising 48 per cent of profits. Australia ranks only 57th for protection of investors €” strong on disclosure laws, weak on director liability €” and just 62nd for the ease of getting permission to build.To gauge investor protection, the study examined laws on related-party transactions €” where companies enter into deals with entities that have a close relationship to the company, such as firms owned by directors. Australia's disclosure rules in this field were strong.On average, the report says, a business in Australia needs to go through 16 procedures taking 221 days to get a building permit. In Hong Kong, it takes just seven procedures and 67 days. Their building could be finished before ours is started.
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