The mining industry in Australia has been on an upward trend over the past decade. Australia is one of the world's largest producers of coal, iron ore, alumina, lead and zinc. There is high demand from China, Japan, South Korea and the US for Australia’s commodities, including both hard commodities and soft ones such as agriculture.  

The country’s banks are supported by efficient regulatory frameworks and an established financial system; collectively they reinforce Australia's status as an attractive investment destination.  

Corporate Treasury in Australia 

Australia has sound banks, a highly skilled English-speaking workforce and close ties with the rapidly growing Asia-Pacific region. In this section, we highlight some of the key benefits the country offers to treasury and cash management. 

Financial Market Development 

• Sydney is ranked 18th in the 2021 Global Financial Centres Index by Z/Yen Group, up 14 places compared with the previous year. Melbourne is ranked 23rd.  
• Australia has a highly skilled English-speaking workforce, excellent business infrastructure, a stable political system and a sound legal environment. 
• There are no general restrictions on moving money in and out of Australia. 

Sophistication of Banking Systems 

• There are 40 domestic banks in Australia, with the sector dominated by four large banks. There are also seven foreign subsidiary banks and nearly 50 branches of foreign banks. 
• Australia’s foreign-exchange market accounts for 1.4% of average daily global turnover, according to the Bank for International Settlements. 
• Australia has an established debt market. Government securities, semi-government securities, corporate bonds and kangaroo bonds—Australian dollar-denominated bonds issued by non-resident companies—are all available. There is more than AUD1 trillion of outstanding corporate bonds.   

Regulatory Bodies 

• The banking industry is regulated by the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission. The Reserve Bank of Australia is the central bank.   

Tax 

• The corporate income tax rate is 30%. For companies with an aggregated turnover threshold of less than AUD50 million and where no more than 80% of their assessable income is passive income, the corporate tax rate is reduced to 25% in the 2021/22 tax year. 
• Resident companies are taxed on worldwide income. Non-resident companies are generally taxed on Australian-sourced income. 
• The profits of a branch of a foreign company are taxed at the same rate as resident company profits. There is no branch profit-remittance tax on the remittance of profits to the head office by the branch of a foreign company. 
• The standard rate for Goods and Services Tax (GST) is 10%, with certain goods and services being zero-rated whilst others are exempted. 
• Capital gains are generally assessed with ordinary income and are subject to corporate income tax. 
• Interest expenses that are used for business purposes are generally tax-deductible. However, the deductibility of the interest may be restricted when the company’s allowable debt level exceeds the safe-harbour debt-to-equity ratio of 1.5:1, unless it can satisfy the arm’s length test.   
• Resident companies are not subject to withholding tax (WHT). WHT of 30% is charged on dividends and 10% WHT is charged on interest for non-resident companies where no treaties are in place. Rates range from 0% to 30% for dividends and from 0% to 25% on interest where a tax treaty is in place and the non-resident company can provide the Certificate of Residence.  
• All states and territories impose a stamp duty on a wide variety of transactions at different rates. 
• Australia has tax treaties with more than 45 countries and territories. 
• The Australian government has enacted a range of measures to address tax avoidance in Australia by multinational companies with global revenue of more than AUD1 billion. 
• Australia is a signatory to the Organisation for Economic Co-operation and Development’s Multilateral Competent Authority Agreement, through which information is exchanged between tax administrations, to provide a single, global picture on some key indicators of economic activity within multinational enterprises. 

  Benefits for Regional Treasury Centres 

• Australia has strong economic and cultural ties with the fast-growing Asia-Pacific region, as well as overlapping trading hours.   
• Australia is developing as a renminbi settlement hub for the Asia-Pacific region. 
• Australia has a liquid foreign-exchange market and the necessary clearing and settlement systems to facilitate smooth financial transactions. 
• It is a member of the Asian Payment Network, a common payment settlement platform within the Asia-Pacific region. 
• Domestic and cross-border notional pooling and cash concentration are permitted for resident and non-resident companies.