Australia has slipped down the ranks of the World Bank’s latest rankings of the best places to do business, but remains one of the best places to start a business, get credit, enforce contracts and resolve insolvency.
It’s also a good place to trade across borders, register property, deal with construction permits, get electricity and pay tax.
In a report entitled Doing Business by the World Bank and the International Finance Corporation, Australia was ranked 15th out of 183 countries in terms of business-friendly regulation as reflected in its ranking on the ease of doing business.
This was down from 11th the year before and from 10th in 2009, with just one reform over the course of the year to June 2011 – namely clarifying the priority of claims of unsecured creditors over all shareholders’ claims and introducing further regulation of the progression of insolvency practitioners.
But it was ranked the second-best economy in which to start-up a business, the 8th best for getting credit, the 17th for enforcing conflict and 17th for resolving insolvency.
For dealing with construction permits it ranked 42nd, for registering property it ranked 38th, 65th for protecting investors, 53rd for paying taxes, and for trading across borders it ranked 30.
Small Business Minister Nick Sherry says the report “confirms that Australia is a great place to start and run a business”.
Sherry says the Government’s investment in skills, its tax reform package and its national broadband network are “vital to strengthen Australia’s position as a globally competitive economy.”
But Shadow Small Business Minister Bruce Billson says the rankings “reinforce the ‘field evidence” he is hearing, noting that Australia had gone backwards on every measure except dealing with construction permits.
According to the report, the 20 economies with the most business-friendly regulation were:
The report said these countries have “implemented effective yet streamlined procedures for regulatory processes such as starting a business and dealing with construction permits as well as strong legal protections of property rights. They also periodically review and update business regulations as part of a broader competitiveness agenda and take advantage of new technologies through e-government initiatives.”
The report said that overall in the year to June 2011, governments in 125 economies implemented 245 institutional and regulatory reforms – 13% more than the previous year, and driven by low- and lower-middle income economies.
“Against the backdrop of the global financial and economic crisis, policy makers around the world continue to reform business regulation at the level of the firm, in some areas at an even faster pace than before,” said Janamitra Devan, Vice President and Head of Network Financial & Private Sector Development, the World Bank Group.
“Worldwide, regulatory reforms aimed at streamlining such processes as starting a business, registering property or dealing with construction permits are still the most common. But more and more economies are focusing their reform efforts on strengthening legal institutions such as courts and insolvency regimes and enhancing legal protections of investors and property rights.”
It also found there have been 1,750 improvements in business regulation since the report started in 2004.
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