By the end of 2021, the Australian economy is expected to grow by 4.5% and the 2022 projection is 2.8%. Until 2020, Australia had 28 years of consecutive annual economic growth and recovered sharply from the COVID-19 pandemic. The UK is Australia’s second greatest FDI contributor, investing £374.3B in 2019 – a 17.5% increase from 2018. The
strengthening of economic relations continues to accelerate through negotiations for the Australia-United Kingdom FTA, which began in June 2020. At present, it is estimated there is over USD$2.6bn2 worth of untapped export growth potential for British companies, and some key opportunities lie across mining, healthcare, machinery, infrastructure, financial services, ecommerce, fintech, tech & cyber security3. The North West and Greater Manchester have strong expertise in these sectors and offer great innovation.
Australia continues to proactively support its economy through COVID-19. In March 2021, the Australian Government added £61.5m to 2020’s £132m commitment to the International Freight Assistance Mechanism (IFAM), a fund set up to help keep international freight routes operating until September 2021. IFAM currently prioritises medical supplies, medicines, and equipment for COVID-19 health responses, on inbound flight schedules to Australia.
Australia’s mining and agriculture competitivity requires industrial machinery and technical expertise that is often sourced internationally. There is ongoing investment in the mining sector with two of Australia’s largest lithium miners merging - they are expected to supply 10% of worldwide demand to meet growth in areas such as electric vehicles. Others are spending up to £44.2m on mining expansion. Agriculturally, 95% of equipment and machinery is imported.
Australia meets Asia’s great food demand, however innovations across all aspects of production and supply chains are required. International suppliers provide high-tech goods, electronics, industrial tools, equipment, and machinery. Australian companies are eager for new products and solutions in robotics, automation, remote monitoring, and predictive maintenance. Furthermore, the space sector has been identified as a National Manufacturing Priority Area. Australia is a major purchaser of aircraft and spacecraft parts, accessories and services in aerospace and the military.
A key growth industry is healthcare as the aged population is expected to double by 2057. Australia’s need in health-related infrastructure, equipment and upgrades is reflected in the newly announced £274.4b spend towards health over the next four years, £9.7b of which is specifically for aged care.
Other major opportunities recently announced in The Federal Budget 2021:
£1b for vaccines
£82m for COVID-related health services
£1.12b for aviation, tourism, the arts, and international education providers
£8.2b for additional infrastructure commitments
£65m for the Digital Economy Strategy
£82m for manufacturing expansion and job creation across six priority areas, including medical products and clean energy
£1.1b in R&D tax incentives (Modern Manufacturing Strategy)
£87m for priority technologies, including clean hydrogen and energy storage
£147.3b over 10 years for defence capabilities
£122.8m for brewer and distiller tax relief (Excise Refund Scheme)
£20.4m over 3 years for initiatives in trade system modernisation.
The Australian Government is evidently spending substantially to boost economic growth. Greater Manchester companies with capabilities in the sectors mentioned in this article should consider Australia as an attractive market in the short and medium term.
*This article uses OANDA’s currency exchange (24/05/2021) from AUD to GBP. NEED HELP TRADING WITH AUSTRALIA?
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