Regulatory settings and standards that enhance competitiveness

The Government and industry agree that addressing competitiveness constraints at home is a priority to boost services exports.

Industry highlighted that domestic policy and regulatory settings have real implications for the competitiveness of Australian services exporters, and for Australia’s reputation as an open economy and a trusted provider of quality services offerings.

However, proposals for domestic policy and regulatory reforms do not always consider the impacts on Australia’s services exporters. Business representatives provided examples of government decisions, relating to security and visa issues for example, which have had negative and unintentional consequences for services exports.

Industry emphasised that more comprehensive consultation is needed to ensure trade and investment issues are fully considered in the policymaking process. Particular effort needs to be made to engage micro, small and medium-sized service providers, which overwhelmingly dominate the services sector.

Digital trade is an increasingly important contributor to the Australian economy and offers significant opportunities for Australian businesses and consumers. Around half of Australian businesses are already engaged in the digital economy and this number will grow further in the future, particularly driven by businesses moving online during COVID-19.

Industry noted the need, as data becomes a key resource, for industry and government to work together to design and advocate new domestic and international governance systems that enable trade while ensuring appropriate consumer protections, such as privacy. For example, Australia can play a leadership role by implementing the voluntary APEC Cross Border Privacy Rules and promoting their adoption in our region.

Industry noted the projected strong growth in e-commerce in services (digitally-purchased and digitally-delivered services) and the benefits for Australian business, including SMEs. However, they identified insufficient understanding, including at the government level, of how Australian

Firms can and do use e-commerce to expand into export markets. They saw a need to improve policy coordination on e-commerce issues to support this growth.

The establishment of a services industry-led body would help Government and industry better work together on e-commerce for services, including ways to strengthen exports of professional and business services, as well as creative services – film, video games, music and others – on digital platforms. This will help Government agencies and the private sector better understand the drivers that create competitiveness in Australia’s digitally-enabled services sector.

The Government is working to drive Australia to become a leading digital economy by 2030. We agree that consultation in the development of e-commerce and digital policies help ensure they are fit for purpose and achieve desired outcomes, including helping Australian businesses compete on a global stage, given the rapid level of change in the digital economy.

We are undertaking a wide range of consultations to better understand how domestic regulations affect businesses. We recognise that more can be done to identify the potential effects on businesses earlier and take these into account when designing business regulation. The Government welcomes the establishment of an industry-led body to engage on e-commerce and digital economy policy issues.

The Office of Best Practice Regulation, which oversees the Government’s Regulation Impact Assessment framework, works with departments and agencies to ensure trade and investment impacts are both identified and to the greatest extent quantified, in all relevant regulatory proposals.

The Government is committed to monitoring international tax developments to ensure Australia remains well placed and competitive to attract foreign investment. Australia’s existing Double Tax Agreements (treaties) play an important role in removing tax barriers that impede movement of people, capital and technology, and thereby improve Tax certainty for firms with cross-border activities. The Government will continue to consider whether Australia’s Double Tax Agreements appropriately support key bilateral trade relationships, whilst maintaining the tax System’s integrity.

The Government recognises that quality rules that allow for cross-border data mobility, with appropriate privacy protections, are critical for the functioning of a competitive digital economy. APEC has endorsed Australia’s participation in its Cross-Border Privacy Rules system, effective from 23 November 2018.

The Attorney-General’s Department has been working through some of the legal complexities of domestic Implementation of these rules and consulting with Australia’s privacy regulator, the Office of the Australian Information Commissioner.