Article by Caroline Hong, which appeared in the Feb 2013 issue of the My Business magazine and also on MSME news network.
Kick-starting 2013 with a bang
– Malaysia Australia Free Trade Agreement (MAFTA).
View of Twin Towers from KL tower in Kuala Lumpur Malaysia
Welcome to 2013. I hope you’ve taken some time over the festive season to reflect on what you’ve achieved and learnt from 2012. Here’s to an even better year ahead for Aussie SMEs.
Australian Minister for Trade and Competitiveness Craig Emerson, who is assisting the Prime Minister on the government’s Asian Century policy, has announced a new free trade agreement with Malaysia, which entered into force on the first day of January in 2013. 97.6 per cent of Australian goods currently exported to Malaysia are now eligible for tariff-free treatment, and that figure will rise to 99 per cent in 2017.
The SMEAA welcomes the Malaysia Australia Free Trade Agreement (MAFTA). What a great way to kick start the New Year as Australia prepares to further integrate into the fast growing Asian region in an Asian Century. Not many businesses are fully aware of the many opportunities that open up when Free Trade Agreements (FTA) between one country and another are signed and put into force.
Australia currently has seven FTAs in force: New Zealand, Singapore, Thailand, Chile, the US, multiparty ASEAN (Australia-New Zealand FTA), and now Malaysia. A further nine FTAs are currently under negotiation: China, the Gulf, India, Japan, Korea, Indonesia, Pacific Islands, Regional Comprehensive Regional Partnership (ASEAN) and Trans-Pacific Partnership agreements.
Malaysia’s Minister for International Trade and Industry, Mustafa Mohamed, and Emerson, signed the MAFTA on May 22, 2012. It is not a small outcome, considering that in 2011 Malaysia had a GDP of USD278.7 billion with a GDP growth of 5.1 per cent. Malaysia is currently Australia’s 10th largest trading partner and worth $17.2 billion.
The SMEAA sees the MAFTA as great news for Australian SME goods exporters, as well as Australian SME service suppliers and investors. Anything that makes it easier to do business for Australians will always be welcomed, as new opportunities, increased transparency, business certainty, improved market access for liquid milk, processed food, automotive vehicles and parts, steel and iron.
What is good for Australian SME business is also good for consumers, because removing Australian tariffs also means lower costs of consumer goods for Australians.
Australian wine will get the best tariff treatment possible too. Rice will have all tariffs eliminated by 2026. Australian investors can be guaranteed the right to majority ownership in Malaysian companies, including education services, telecommunications, professional services, all providing a much friendlier environment to do business between the two countries, including allowing Australian business executives to stay longer in Malaysia.
Emerson also believes Australia’s increasing optimism in the economy is soundly based, citing 13 reasons, including Australia’s low inflation rate, low unemployment at (five per cent), China’s economy resuming expansion, investment in Australia at 50-year highs, productivity growth, carbon price for a better carbon future and others. This is all good news for SME owners, as optimism in such announcements always sends a sense of hope The SMEAA is pleased with this bright spark to 2013.
However, we are also vigilant to hear from Leader of the Opposition, Tony Abbott, who in his recently published book A Strong Australia talks about the values, directions and policy priorities of the next Coalition government. A stronger economy, stronger communities, cleaner environment, more secure borders and the infrastructure of the future, is the gist of his vision. There will also be lower taxes, increased productivity, higher wages and better services, with less red tape.
Here at the SME Association of Australia, we support any policy to reduce red tape and anything that will help build a stronger Australia. Anything that will allow SME business owners to work with passion while gaining affluence. Anything that will allow SME business owners to have meaning in their lives through their business as they pursue their dreams. Business owners do not go into business to do paperwork for the government, and red tape will continue to be a sore point until it goes away.
The Australian Productivity Commission is currently seeking input from small business owners on how Federal, State and local regulators impact on the small business owners’ cost of running their business. They are also conducting a nine-month study on how the regulators engage with small business owners in compliance and enforcement activities, and how they think the approach was burdensome and suggest improvements in the methods that regulators engage with small business.
SME business owners are people and their voice can be very useful to help shape the future direction for a strong Australia.
With acknowledgement and thanks to MyBusiness http://www.mybusiness.com.au
You can also subscribe for the digital edition on http://mybusiness.realviewdigital.com/
My Business is the official publication of the SME Association of Australia http://www.smeaustralia.asn.au
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