Doing Business 2018 Australia Economy Pro le of Australia Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Australia Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region OECD high income DB 2018 Rank 190 1 Australia Income Category High income 14 Population 24,127,159 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 54,420 0 100 80.14 City Covered Sydney DB 2018 Distance to Frontier (DTF) 0 100 86.55: New Zealand (Rank: 1) 82.54: United States (Rank: 6) 80.14: Australia (Rank: 14) 79.29: Canada (Rank: 18) 77.46: Regional Average (OECD high income) Page 3   75.68: Japan (Rank: 34) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Australia Ease of Doing Business in Region OECD high income DB 2018 Rank 190 1 Australia Income Category High income 14 Population 24,127,159 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 54,420 0 100 80.14 City Covered Sydney DB 2018 Distance to Frontier (DTF) 0 100 86.55: New Zealand (Rank: 1) 82.54: United States (Rank: 6) 80.14: Australia (Rank: 14) 79.29: Canada (Rank: 18) 77.46: Regional Average (OECD high income) 75.68: Japan (Rank: 34) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Australia 7 6 6 3 1 18 26 28 47 51 57 55 82 95 Rank 109 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Australia 100 96.47 90.00 84.39 85.62 82.31 79.00 78.79 80 74.17 70.65 60.00 60 DTF 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:0.00 Change:-0.05 Change:0.00 Investors Change:+0.02 Borders Change:0.00 Change:+0.06 Change:0.00 Permits Change:0.00 Change:0.00 Change:+0.01 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:0.00 Change:-0.05 Change:0.00 Investors Change:+0.02 Borders Change:0.00 Change:+0.06 Change:0.00 Permits Change:0.00 Change:0.00 Doing Business 2018 Australia Change:+0.01 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Australia Standardized Company Legal form Proprietary Company (Pty Ltd) Paid-in minimum capital requirement AUD 0 City Covered Sydney OECD high OECD high Indicator Australia income income Overall Best Performer Procedure – Men (number) 3 4.9 4.9 1.00 (New Zealand) Time – Men (days) 2.5 8.5 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 0.7 3.1 3.1 0.00 (United Kingdom) Procedure – Women (number) 3 4.9 4.9 1.00 (New Zealand) Time – Women (days) 2.5 8.5 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 0.7 3.1 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 8.7 8.7 0.00 (113 Economies) Figure – Starting a Business in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 99.96: New Zealand (Rank: 1) 98.23: Canada (Rank: 2) 96.47: Australia (Rank: 7) 91.35: Regional Average (OECD high income) 91.23: United States (Rank: 49) 84.37: Japan (Rank: 106) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Australia – Procedure, Time and Cost Time Cost 2.5 0.8 0.7 2 ost (% of income per capita) 0.6 0.5 Time (days) 1.5 0.4 1 0.3 Page 6   0.2 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Australia Figure – Starting a Business in Australia – Procedure, Time and Cost Time Cost 2.5 0.8 0.7 2 Cost (% of income per capita) 0.6 0.5 Time (days) 1.5 0.4 1 0.3 0.2 0.5 0.1 0 0 1 2 3 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Australia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Complete and lodge ASIC Form 201 “Application for Registration as an 1 day AUD 469 Australian Company"; Obtain a certi cate of incorporation and an Australian company number (ACN) Agency : Australian Securities and Investments Commission (ASIC) To register a Pty Ltd company, the applicant must complete and submit an ASIC Form 201 (""Application for Registration as an Australian Company"") and pay the prescribed fee of AUD 469. Any person to be appointed as a director or secretary of the company must have consented in writing to that appointment. Similarly, each shareholder of the company must have consented to become a shareholder. At least 1 director (and, if the company has appointed secretaries, at least 1 secretary) must ordinarily reside in Australia. The registered o ce of the company must be an address in Australia. The company may adopt its own constitution or rely upon the Replaceable Rules in the Corporations Act 2001. Prior to lodging the application for registration, the applicant should con rm the availability of the proposed company name. If no name is speci ed, the company will simply be referred to by its Australian Company Number (""ACN""). Upon incorporation, ASIC will issue to the company a certi cate of incorporation, which evidenced that the company has been incorporated on and from the date of issue. Page 7   (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Australia Details – Starting a Business in Australia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Complete and lodge ASIC Form 201 “Application for Registration as an 1 day AUD 469 Australian Company"; Obtain a certi cate of incorporation and an Australian company number (ACN) Agency : Australian Securities and Investments Commission (ASIC) To register a Pty Ltd company, the applicant must complete and submit an ASIC Form 201 (""Application for Registration as an Australian Company"") and pay the prescribed fee of AUD 469. Any person to be appointed as a director or secretary of the company must have consented in writing to that appointment. Similarly, each shareholder of the company must have consented to become a shareholder. At least 1 director (and, if the company has appointed secretaries, at least 1 secretary) must ordinarily reside in Australia. The registered o ce of the company must be an address in Australia. The company may adopt its own constitution or rely upon the Replaceable Rules in the Corporations Act 2001. Prior to lodging the application for registration, the applicant should con rm the availability of the proposed company name. If no name is speci ed, the company will simply be referred to by its Australian Company Number (""ACN""). Upon incorporation, ASIC will issue to the company a certi cate of incorporation, which evidenced that the company has been incorporated on and from the date of issue. 2 Register for ABN with the Australian Taxation O ce (ATO) Less than one day no charge Agency : Australian Taxation O ce (online procedure) This procedure is required under the Income Tax Assessment Act 1936 and the New Tax System (Goods and Services Tax) Act of 1999. Depending on the company's circumstances and location, it must comply with di erent taxation requirements: - If the annual company turnover is AUD$75,000 or more, the company must register for Goods and Services Tax (GST) by obtaining an 11-digit Australian Business Number (ABN). The annual company turnover represents its gross business income (not its pro t). Companies with lower annual turnover may also choose to register for the Goods and Services Tax. - The application to ABN can be submitted electronically at the Business Entry Point, www.abr.gov.au. If the electronic submission is successful, the applicant will be provided with an ABN at the end of the Internet session. Alternatively, a hard copy application may be submitted to the ATO. The ATO will then mail the ABN within 28 days of receiving the application. -The company must deduct taxes from employee pay, provide payment summaries, contribute to employee superannuation and report and issue payments to the ATO. Companies may also register for Pay As You Go (PAYG) at www.abr.gov.au. Otherwise, they may register with the ATO by postal mail or phone or through a tax agent. State and territory taxes (e.g., stamp duty, Page 8   incorporation, which evidenced that the company has been incorporated on Doing and from the Business issue. date of Australia 2018 2 Register for ABN with the Australian Taxation O ce (ATO) Less than one day no charge Agency : Australian Taxation O ce (online procedure) This procedure is required under the Income Tax Assessment Act 1936 and the New Tax System (Goods and Services Tax) Act of 1999. Depending on the company's circumstances and location, it must comply with di erent taxation requirements: - If the annual company turnover is AUD$75,000 or more, the company must register for Goods and Services Tax (GST) by obtaining an 11-digit Australian Business Number (ABN). The annual company turnover represents its gross business income (not its pro t). Companies with lower annual turnover may also choose to register for the Goods and Services Tax. - The application to ABN can be submitted electronically at the Business Entry Point, www.abr.gov.au. If the electronic submission is successful, the applicant will be provided with an ABN at the end of the Internet session. Alternatively, a hard copy application may be submitted to the ATO. The ATO will then mail the ABN within 28 days of receiving the application. -The company must deduct taxes from employee pay, provide payment summaries, contribute to employee superannuation and report and issue payments to the ATO. Companies may also register for Pay As You Go (PAYG) at www.abr.gov.au. Otherwise, they may register with the ATO by postal mail or phone or through a tax agent. State and territory taxes (e.g., stamp duty, payroll tax, and land tax) may also be imposed, with requirements di ering according to company location. - Companies with annual turnover of AUD$75,000 or more must register for an ABN. Failure to do so will result in GST being levied on all company sales since the required date of registration even if the sale price of any goods or services has not been grossed up to include the tax. Furthermore, the company may incur penalties and interest charges for any overdue payments. - Further information in connection with ABN, GST and PAYG registration may be found on the ATO website (www.ato.gov.au). 3 Sign up for Worker Compensation Insurance at an insurance agency 1 day no charge Agency : Workers Compensation Insurance The Workers Compensation Act of 1987 and the Workplace Injury Management and Workers Compensation Act of 1998 state that the worker compensation insurance is a compulsory requirement for employers in Australia. The premium rate is based on description of the company’s main business. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional Page 9   certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Australia Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 10   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Australia Standardized Warehouse Estimated value of warehouse AUD 3,369,428.50 City Covered Sydney OECD high OECD high Indicator Australia income income Overall Best Performer Procedures (number) 11 12.5 12.5 7.00 (Denmark) Time (days) 121 154.6 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 0.9 1.6 1.6 0.10 (5 Economies) Building quality control index (0-15) 14.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 86.36: New Zealand (Rank: 3) 84.39: Australia (Rank: 6) 75.77: United States (Rank: 36) 75.14: Regional Average (OECD high income) 73.36: Japan (Rank: 50) 72.87: Canada (Rank: 54) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Australia – Procedure, Time and Cost Time Cost 120 0.6 100 0.5 Cost (% of warehouse value) 80 0.4 Time (days) 60 0.3 40 0.2 20 0.1 0 0 1 *2 3 4 5 6 7 8 9 10 11 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 11   component indicators. Doing Business 2018 Australia Figure – Dealing with Construction Permits in Australia – Procedure, Time and Cost Time Cost 120 0.6 100 0.5 Cost (% of warehouse value) 80 0.4 Time (days) 60 0.3 40 0.2 20 0.1 0 0 1 *2 3 4 5 6 7 8 9 10 11 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Australia and comparator economies – Measure of Quality 16 15.0 14.0 14.0 14 12 11.0 11.4 10.0 Index score 10 8 6 4 2 0 Australia Canada Japan New Zealand United States OECD high income Details – Dealing with Construction Permits in Australia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a Site Survey/Analysis Plan 21 days AUD 4,000 Agency : Private surveyor One of the mandatory requirement to obtain a building permit is to submit a Site Survey/Analysis Plan . 2 Verify if a development application is required 1 day no charge Agency : Local Council It is the responsibility of the applicant to contact a planner at the nearest Council Location before preparing a Development Application (DA), to check: * whether the proposed development is permissible; * whether a DA is required; and Page 12   Australia Canada Japan New Zealand United States OECD high income Doing Business 2018 Australia Details – Dealing with Construction Permits in Australia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a Site Survey/Analysis Plan 21 days AUD 4,000 Agency : Private surveyor One of the mandatory requirement to obtain a building permit is to submit a Site Survey/Analysis Plan . 2 Verify if a development application is required 1 day no charge Agency : Local Council It is the responsibility of the applicant to contact a planner at the nearest Council Location before preparing a Development Application (DA), to check: * whether the proposed development is permissible; * whether a DA is required; and * how the City's planning instruments - plans, codes and policies - a ect the proposed development. BuildCo should ensure that the relevant planning controls have been identi ed and satis ed. There are a range of planning instruments that apply to various types of development and locations within Sydney. Most environmental and planning law in Australia varies from one Australian state to another. In Sydney, in the state of New South Wales, development will generally be assessed under one of the regimes in the Environmental Planning and Assessment Act 1979 (Planning Act). The warehouse to be constructed by BuildCo is most likely to fall under Part 4 of the Planning Act and will most likely require development consent from the relevant local council. The Planning Act provides that, for certain types of development, the concurrence of an authority other than the consent authority must be obtained. The conditions for approval of development assessed under Part 4 may also require the developer to obtain further certi cates or approvals. These will add cost and time. The council's local environment plan (LEP) usually identi es whether development consent is required. The LEP categorizes development as requiring consent, not requiring consent, or prohibited. In most cases, the zoning of the site determines the types of development permitted on the land. Note that the construction of a warehouse is a type of development that almost always requires consent. If the development requires development consent, the local council will usually be the consent authority. However, in some cases, another authority (such as a State minister) may be the consent authority. 3 File development application with consent authority 49 days AUD 7,064 Agency : Local Council It is a legal requirement to submit digital copies of plans and supporting documentation. A minimum of eight sets of drawings of the proposed development, plus one A4 set and a digital copy, should be submitted. These must include: site survey/analysis plan • site plan • oor plans • elevations and relevant Page 13   cross sections • landscape plan • shadow diagrams (two storey development the consent authority. Doing Business 2018 Australia 3 File development application with consent authority 49 days AUD 7,064 Agency : Local Council It is a legal requirement to submit digital copies of plans and supporting documentation. A minimum of eight sets of drawings of the proposed development, plus one A4 set and a digital copy, should be submitted. These must include: site survey/analysis plan • site plan • oor plans • elevations and relevant cross sections • landscape plan • shadow diagrams (two storey development and as otherwise speci ed), and a Statement of Environmental E ects (SEE). The SEE must be submitted with the development application. Details must include: - • description of the site; • description of the proposed development including all proposed works; • details of compliance with the relevant environmental planning instruments i.e. Baulkham Hills Local Environmental Plan 2005 and Baulkham Hills Development Control Plan (BHDCP); • written justi cation to vary any development standard contained within a Section of BHDCP; • Details of how the development satis es the provisions of Section 79C of the Environmental Planning and Assessment Act 1979. If the assessment is satisfactory, the consent authority will grant BuildCo development consent, which may be subject to conditions. The Development Application will be advertised for approximately 21 days to give the surrounding neighbors the opportunity to contest the planned development in that area. Once the advertising period is over, it will typically take 6 weeks for the development certi cate to be issued. 4 Apply for a construction certi cate 21 days AUD 16,093 Agency : Sydney City Council After a Development Consent has been issued by the Local Council and before any building work is carried out, the owner must apply for a Construction Certi cate. This certi cate shows that the proposed development satis es the Environmental Planning and Assessment Regulation 2000. This includes: • The construction plans and speci cations must comply with the relevant standards (ie Building Code of Australia). • The construction plans and speci cations are consistent with the development consent; and • All conditions of the development consent requiring compliance prior to the issuance of a construction certi cate are nalized (i.e., payment of the long service levy has been made, the re protection and structural capacity of the development is adequate, etc.). The Principal Certifying Authority (PCA) can be a Council or a private accredited building surveyor. If BuildCo chooses the Council as the PCA, an appointment form must be completed after the Construction Certi cate is obtained. BuildCo must con rm with the PCA what work will be done, the fee, and any other requirements. When the Hill Shire City Council is the PCA, the developer submits a Notice of Commencement of Work 2 days before work begins (Under Sections 81 A(2) (b)(i),(c), or (4)(b)(i),(c), 86(1)and (2) and 109E of the Environmental Planning and Assessment Act 1979). The PCA will also provide a list of mandatory inspections that need to be carried. Page 14   in that area. Once the advertising period is over, it will typically take 6 weeks Doing for 2018 certi the development Business cate to be issued. Australia 4 Apply for a construction certi cate 21 days AUD 16,093 Agency : Sydney City Council After a Development Consent has been issued by the Local Council and before any building work is carried out, the owner must apply for a Construction Certi cate. This certi cate shows that the proposed development satis es the Environmental Planning and Assessment Regulation 2000. This includes: • The construction plans and speci cations must comply with the relevant standards (ie Building Code of Australia). • The construction plans and speci cations are consistent with the development consent; and • All conditions of the development consent requiring compliance prior to the issuance of a construction certi cate are nalized (i.e., payment of the long service levy has been made, the re protection and structural capacity of the development is adequate, etc.). The Principal Certifying Authority (PCA) can be a Council or a private accredited building surveyor. If BuildCo chooses the Council as the PCA, an appointment form must be completed after the Construction Certi cate is obtained. BuildCo must con rm with the PCA what work will be done, the fee, and any other requirements. When the Hill Shire City Council is the PCA, the developer submits a Notice of Commencement of Work 2 days before work begins (Under Sections 81 A(2) (b)(i),(c), or (4)(b)(i),(c), 86(1)and (2) and 109E of the Environmental Planning and Assessment Act 1979). The PCA will also provide a list of mandatory inspections that need to be carried. 5 Apply for approval of building/development plans by Sydney Water 1 day AUD 65 Quick Check Agent Agency : Sydney Water Before any construction work can be done, BuildCo must have the approved construction certi cate plans assessed and stamped by a Sydney Water Quick Check Agent to verify that the proposed building work will not a ect a Sydney Water asset (water supply pipe and/or drainage pipe). A copy of the stamped plans must be provided to the principal certifying authority before work commences. The documents that must be provided are: • A full set of building plans • A site plan to a recognized scale (e.g. 1:500) that shows the full site and the relationship of the proposed building works to the full site (the location on the lot where the building works will take place must be clearly identi ed) • A set of engineering plans detailing the foundations/footings of the proposed building works 6 Notify Hill Shire City Council of Commencement of work and appoint Hill 1 day no charge Shire City Council as PCA Agency : Hill Shire City Council Page 15   The builder will submit a “Notice of Commencement of Building or proposed building works Doing Business 2018 Australia 6 Notify Hill Shire City Council of Commencement of work and appoint Hill 1 day no charge Shire City Council as PCA Agency : Hill Shire City Council The builder will submit a “Notice of Commencement of Building or Subdivision Work” form and Appointment of Council as Principal Certifying Authority under Sections 81A(2)(b)(i),(c), or (4)(b)(i),(c), 86(1)and (2) and 109E of the Environmental Planning and Assessment Act 1979. This form is submitted only when the City of Sydney is retained as the Principal Certifying Authority (PCA). 7 Receive the commencement of building work inspection 1 day AUD 270 Agency : Hill Shire City Council Once a PCA is appointed, it is his responsibility to provide to the applicant a list of the mandatory critical stage inspections (in accordance to Clause 162A of the Environmental Planning and Assessment Regulation 2000) and any other inspections (determined by the PCA) that will be required during construction of the building. The builder needs to be aware of these inspections as they need to be carried out at the appropriate time. It is the responsibility of the builder to contact the PCA at least 48 hours before an inspection is required. Inspections during construction ensure that the construction is consistent with what has been approved in the development consent and construction certi cate, and that the building will meet acceptable standards of health, safety and amenity. Mandatory critical stage inspections are set according to the building class. For the case study of Doing Business, the warehouse is a class 7 building. In the case of a class 5, 6, 7, 8 or 9 building, the building work on the development site must be inspected: • At the commencement of building work • Prior to covering any storm water drainage connections • After the building work has been completed and prior to any occupation certi cate can be issued in relation to the building The cost of inspection when Sydney City Council is the PCA is AUD 309.00 per inspection including 10% GST. However, Doing Business does not include GST in its calculation. 8 Receive inspection prior to covering any stormwater drainage 1 day AUD 270 connections Agency : Hill Shire City Council A second mandatory inspection prior to covering any storm water drainage connections is conducted by the PCA to ensure compliance with the Construction Certi cate. 9 Request and receive connection to water and sewage services 10 days AUD 1,347 Agency : Sydney Water To receive a connection to water and sewage services, BuildCo must rst select a water-servicing coordinator. The coordinator requests a Section 73 Compliance Certi cate (for water and sewerage infrastructure) from Sydney Water on BuildCo’s behalf. Sydney Water issues a notice of requirements to Page 16   the coordinator within 10 days of application receipt (or longer if the Construction Certi cate. Doing Business 2018 Australia 9 Request and receive connection to water and sewage services 10 days AUD 1,347 Agency : Sydney Water To receive a connection to water and sewage services, BuildCo must rst select a water-servicing coordinator. The coordinator requests a Section 73 Compliance Certi cate (for water and sewerage infrastructure) from Sydney Water on BuildCo’s behalf. Sydney Water issues a notice of requirements to the coordinator within 10 days of application receipt (or longer if the development is complex). The notice speci es charges to be paid and the project to be built. If construction is required, certi cation will depend on the time required for the project to be built and taken over by Sydney Water. BuildCo pays the fees, builds the project, and receives the certi cate. Fee schedule for water and sewage connection: • Water (including works): Up to AUD 1215.00 • Sewage (assuming that infrastructure exists): AUD 132.00 10 Request the occupation certi cate 1 day no charge Agency : Hill Shire City Council The authority that has approved the development may monitor the nished development to ensure compliance with laws and local planning policies. If the development does not comply with the development consent, the applicant can be ned (with a penalty notice), ordered to make changes to the development, or taken to the Land and Environment Court of New South Wales. The court may issue orders to remedy or restrain breaches of the development consent (e.g. orders to carry out works, cease certain uses of the premises, or remove the development). In addition, breaches of planning laws may be criminal o ences. New South Wales planning legislation allows any person to bring an action to remedy or restrain a breach of development consent. Thus, in theory, any person may commence proceedings to enforce compliance with the law (a) if a relevant approval (such as a development consent or construction certi cate) has not been obtained where required; or (b) if there has been non-compliance with the conditions of a relevant approval. 11 Receive nal inspection by PCA and obtain the nal occupation 15 days AUD 500 certi cate (OC) Agency : Hill Shire City Council An occupation certi cate is issued by the appointed Principal Certifying Authority (PCA) under the Environmental Planning and Assessment Act 1979 allowing a building to be used and occupied. This certi cate veri es that the PCA is satis ed that the building is suitable to be occupied and used according to the requirements of the Building Code of Australia (BCA). That Code sets required standards for the design and construction of various classes of building to protect health, safety and amenity. There are two types of occupation certi cates: • A nal occupation certi cate allows commencement of either the occupation or use of a new building (including alterations or extensions), or the new use of an existing building resulting from a change of its use • An interim occupation certi cate allows the commencement of either the occupation or use of partially completed building, or of a new use of part of an existing building resulting from a change of use for the building Page 17   An occupation certi cate is required for any new building work or change of certi cate) has not been obtained where required; or (b) if there has been Doing non-compliance Business 2018 the conditions of a relevant approval. with Australia 11 Receive nal inspection by PCA and obtain the nal occupation 15 days AUD 500 certi cate (OC) Agency : Hill Shire City Council An occupation certi cate is issued by the appointed Principal Certifying Authority (PCA) under the Environmental Planning and Assessment Act 1979 allowing a building to be used and occupied. This certi cate veri es that the PCA is satis ed that the building is suitable to be occupied and used according to the requirements of the Building Code of Australia (BCA). That Code sets required standards for the design and construction of various classes of building to protect health, safety and amenity. There are two types of occupation certi cates: • A nal occupation certi cate allows commencement of either the occupation or use of a new building (including alterations or extensions), or the new use of an existing building resulting from a change of its use • An interim occupation certi cate allows the commencement of either the occupation or use of partially completed building, or of a new use of part of an existing building resulting from a change of use for the building An occupation certi cate is required for any new building work or change of use of a building that has a development consent or a complying development certi cate under the EP&A Act. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Australia – Measure of Quality Answer Score Building quality control index (0-15) 14.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer; Private rm. Quality control during construction index (0-3) 3.0 What types of inspections (if any) are required by law to be carried out during Inspections by 2.0 construction? (0-2) external engineer or rm; Page 18   Takes place simultaneously with previous procedure. Doing Business 2018 Australia Details – Dealing with Construction Permits in Australia – Measure of Quality Answer Score Building quality control index (0-15) 14.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer; Private rm. Quality control during construction index (0-3) 3.0 What types of inspections (if any) are required by law to be carried out during Inspections by 2.0 construction? (0-2) external engineer or rm; Inspections at various phases; Risk-based inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, external 2.0 accordance with the approved plans and regulations? (0-2) engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Construction company. Page 19   Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 Liability Doing 2018 regimes and insurance Business index (0-2) Australia 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certi cation exam. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the Page 20   receiving all necessary inspections data are also collected for the second largest business city. architect or engineer. Doing Business 2018 Australia Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 21   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Australia Standardized Connection Price of electricity (US cents per kWh) 17.2 Name of utility Ausgrid City Covered Sydney OECD high OECD high Indicator Australia income income Overall Best Performer Procedures (number) 5 4.7 4.7 2 (United Arab Emirates) Time (days) 75 79.1 79.1 10 (United Arab Emirates) Cost (% of income per capita) 12.4 63.0 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 7 7.4 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 89.88: Japan (Rank: 17) 84.44: Regional Average (OECD high income) 83.97: New Zealand (Rank: 37) 82.31: Australia (Rank: 47) 82.14: United States (Rank: 49) 66.89: Canada (Rank: 105) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Australia – Procedure, Time and Cost Time Cost 8 70 7 60 Cost (% of income per capita) 6 50 5 Time (days) 40 4 30 3 20 2 10 Page 22   1 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Australia Figure – Getting Electricity in Australia – Procedure, Time and Cost Time Cost 8 70 7 60 Cost (% of income per capita) 6 50 5 Time (days) 40 4 30 3 20 2 10 1 0 0 1 2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Australia and comparator economies – Measure of Quality 8.2 8 8 7.8 7.6 Index score 7.4 7.4 7.2 7.2 7 7 7 7 6.8 6.6 6.4 Australia Canada Japan New Zealand United States OECD high income Details – Getting Electricity in Australia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to Ausgrid, receive job number and estimate and 52 calendar days AUD 275 make payment Agency : Ausgrid The connection application can be obtained and submitted via website, email or fax. The majority of interaction by contractors and service providers is undertaken via email or the website. Premises Connection Requirements are detailed in the "ES1" document. This document also includes an application for CT metering for use where required. There is a range of information required on the connection application form relating to details of the connection customer, the intended load to be Page 23   connected, the intended point of connection and details of the electrical Australia Canada Japan New Zealand United States OECD high income Doing Business 2018 Australia Details – Getting Electricity in Australia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to Ausgrid, receive job number and estimate and 52 calendar days AUD 275 make payment Agency : Ausgrid The connection application can be obtained and submitted via website, email or fax. The majority of interaction by contractors and service providers is undertaken via email or the website. Premises Connection Requirements are detailed in the "ES1" document. This document also includes an application for CT metering for use where required. There is a range of information required on the connection application form relating to details of the connection customer, the intended load to be connected, the intended point of connection and details of the electrical contractor / customer's representative. Ausgrid will assess the electrical load to be connected. In this instance, a load above 100Amps per phase connected directly to the street network, Ausgrid will issue a "Basic Connection O er - over 100Amps" (a connection contract) within 10 business days which details the conditions under which Ausgrid will permit the connection and the range of Ausgrid fees that are likely to apply associated with making the connection. The connection applicant has 45 business days to accept the connection o er. Once the connection o er is accepted (includes acceptance of Ausgrid gees), Ausgrid will provided a "Job Number" which enables the Accredited Service Provider (ASP) to obtain an energy meter from Ausgrid. An NMI number (National Market Identi er) will also be provided for use by the applicant when entering into a contract with an energy retailer for the supply of electricity. It is not normally advisable to commence work until the connection o er has been issued / accepted and job number / NMI issued. 2 Hire accredited service provider to carry out external works 11 calendar days AUD 5,152.9 Agency : Accredited Service Provider The customer engages a private Accredited Service Provider (ASP). The ASP does all the connection works from the network to the point of attachment to the premises (consumer's terminals), including installing the energy meter. Once completed, the ASP submits a Noti cation of Service Work (NOSW) detailing the connection works undertaken. 3 Submit CT Metering form to utility 1 calendar day AUD 0 Agency : Ausgrid Service requiring metering of supplies above 100amps needs to submit the CT Metering Application form prior to energizing any new services. The form is used to capture data that is unique to the CT installation site such as • the retailer • customer’s details • electrical contractor • metering provider • ALL existing metering to be removed As the information must be con rmed prior to the energisation of the site and may take up to ten days to process, to avoid delay, it is suggested that Page 24   the details in CT Metering Application form be submitted as soon as meter. Once completed, the ASP submits a Noti cation of Service Work Doing (NOSW) 2018the Australia detailing Business connection works undertaken. 3 Submit CT Metering form to utility 1 calendar day AUD 0 Agency : Ausgrid Service requiring metering of supplies above 100amps needs to submit the CT Metering Application form prior to energizing any new services. The form is used to capture data that is unique to the CT installation site such as • the retailer • customer’s details • electrical contractor • metering provider • ALL existing metering to be removed As the information must be con rmed prior to the energisation of the site and may take up to ten days to process, to avoid delay, it is suggested that the details in CT Metering Application form be submitted as soon as possible. Prior submission of a completed CT Metering form is necessary to enable energisation of the installation. 4 Submit CCEW to Ausgrid so they can undertake an audit inspection of 7 calendar days AUD 0 electrical installation. Agency : Ausgrid The Electrical Contractor undertaking the electrical installation work associated with the premises submits a Certi cate of Compliance Electrical Work (CCEW) to the electricity utility once the work is completed. The utility will undertake an audit inspection of electrical installation. 5 Obtain meter installation by meter provider and receive electricity ow 4 calendar days AUD 2,950 Agency : Meter provider The customer requests Ausgrid (or an Accredited Service Provider) to install the meter. Meter may be installed at the same time than the internal/external installation inspection (but not necessarily). At the completion of the installation inspection the service is energized and electricity starts owing. Takes place simultaneously with previous procedure. Details – Getting Electricity in Australia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 7 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 1.3 System average interruption frequency index (SAIFI) 0.7 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Page 25   Does the distribution utility use automated tools to restore service? Yes Takes place simultaneously with previous procedure. Doing Business 2018 Australia Details – Getting Electricity in Australia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 7 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 1.3 System average interruption frequency index (SAIFI) 0.7 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online https://www.origine nergy.com.au/conte nt/dam/origin/busin ess/Documents/ene rgy-price-fact- sheets/nsw/1July201 7/NSW_Electricity_S mall%20Business_Es sential%20Energy_St andard%20Publishe d%20Rate.PDF Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property Page 26   If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Australia Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value AUD 3,369,428.50 City Covered Sydney Page 27   OECD high OECD high Doing Business 2018 Australia Standard Property Transfer Property value AUD 3,369,428.50 City Covered Sydney OECD high OECD high Indicator Australia income income Overall Best Performer Procedures (number) 5 4.6 4.6 1.00 (4 Economies) Time (days) 4.5 22.3 22.3 1.00 (3 Economies) Cost (% of property value) 5.2 4.2 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 20.0 22.7 22.7 29.00 (Singapore) Figure – Registering Property in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 94.47: New Zealand (Rank: 1) 79.31: Canada (Rank: 33) 76.81: Regional Average (OECD high income) 76.80: United States (Rank: 37) 74.17: Australia (Rank: 51) 73.92: Japan (Rank: 52) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Australia – Procedure, Time and Cost Time Cost 4.5 6 4 5 3.5 Cost (% of property value) 3 4 Time (days) 2.5 3 2 1.5 2 1 1 0.5 0 0 1 *2 *3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 28   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Australia Figure – Registering Property in Australia – Procedure, Time and Cost Time Cost 4.5 6 4 5 3.5 Cost (% of property value) 3 4 Time (days) 2.5 3 2 1.5 2 1 1 0.5 0 0 1 *2 *3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Australia and comparator economies – Measure of Quality 30 26.0 24.5 25 22.7 21.5 20.0 20 Index score 17.6 15 10 5 0 Australia Canada Japan New Zealand United States OECD high income Details – Registering Property in Australia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 File for a title search certi cate, land tax certi cate, deposited plans, Less than a day AUD 40.7 for online easements and covenants recorded on the title from the Land and (online procedure title search, land tax Property Information Department and simultaneous certificate, online Agency : Land and Property Information (Division of the Department of with Procedures 2 plans, easements Finance, Service and Innovation of New South Wales Government ) and 3) and covenants The seller is responsible for obtaining a title search, plans (known as Deposited Plans), easements and covenants recorded on title from the Land and Property Information department, according to by law, the Conveyancing Act 1919 and the Conveyancing (Sale of Land) Regulation 2005. These documents must be attached to the sale contract (prescribed documents); failure to do so may entitle the purchaser to rescind the Page 29   contract. Australia Canada Japan New Zealand United States OECD high income Doing Business 2018 Australia Details – Registering Property in Australia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 File for a title search certi cate, land tax certi cate, deposited plans, Less than a day AUD 40.7 for online easements and covenants recorded on the title from the Land and (online procedure title search, land tax Property Information Department and simultaneous certificate, online Agency : Land and Property Information (Division of the Department of with Procedures 2 plans, easements Finance, Service and Innovation of New South Wales Government ) and 3) and covenants The seller is responsible for obtaining a title search, plans (known as Deposited Plans), easements and covenants recorded on title from the Land and Property Information department, according to by law, the Conveyancing Act 1919 and the Conveyancing (Sale of Land) Regulation 2005. These documents must be attached to the sale contract (prescribed documents); failure to do so may entitle the purchaser to rescind the contract. 2 File for a zoning certi cate from the Municipal Council 2 days (about 7 AUD 53 Agency : Municipal Council (City of Sidney) days to return by post) (simultaneous The seller is responsible for obtaining a Zoning Certi cate from the Municipal with Procedures 1 Council. This document must be attached to the Contract for Sale and 3) (prescribed documents). A Building Certi cate can also be obtained from the Municipal Council, but it is not mandatory. Certain municipal councils now process applications through the internet and deliver Zoning Certi cates electronically. In the case of Sidney, it is possible to request a certi cate online at https://online.cityofsydney.nsw.gov.au/Certi cates, and it is possible to receive it by email. 3 File for a drainage diagram from the local water authority 1 day (can be done AUD 19.89 Agency : Local water authority (Sydney Water) online, then wait 7 days for return by The seller is responsible for obtaining a Drainage Diagram from the water post) (simultaneous authority. This document must be attached to the contract for sale with Procedures 1 (prescribed documents). This document can be obtained online at and 2) http://www.sydneywater.com.au/tapin/index.htm 4 Stamp contract with ad valorem stamp duty (i.e. according to value) at 1 day (over the Stamp duty, the O ce of State Revenue counter, can be according to the Agency : NSW O ce of State Revenue done online as well) following schedule of tariffs : If there are no outstanding interests in the property, then the solicitor for Below AUD 14,000, the buyer (if one is used) prepares a Transfer form (obtained from the Land the fee is 1.25% of and Property Information Division ("LPI"), also available online) for execution property value of by the seller. The transfer may also be completed by the buyer. property The Transfer form (and others) are available in a PDF format on the LPI Between AUD 14,001 website at: and AUD 30,000, the fee is AUD 175 + 1.5% http://www.lpma.nsw.gov.au/land_property_information of excess over AUD 14,000 The forms are interactive with popup notes to assist with their completion. Between AUD 30,001 The contract is sent to the O ce of State Revenue and stamp duty is paid (by and AUD 80,000, the purchaser). If stamping of the Contract does not occur within 3 months of fee is AUD 415 + exchange penalty duty is payable on the amount of stamp duty payable at 1.75% of excess over the rate of 15.75% per annum. AUD 30,000 Between AUD 80,001 Page 30   and AUD 300,000, with Procedures 1 (prescribed documents). This document can be obtained online at and 2) Doing http://www.sydneywater.com.au/tapin/index.htm Business 2018 Australia 4 Stamp contract with ad valorem stamp duty (i.e. according to value) at 1 day (over the Stamp duty, the O ce of State Revenue counter, can be according to the Agency : NSW O ce of State Revenue done online as well) following schedule of tariffs : If there are no outstanding interests in the property, then the solicitor for Below AUD 14,000, the buyer (if one is used) prepares a Transfer form (obtained from the Land the fee is 1.25% of and Property Information Division ("LPI"), also available online) for execution property value of by the seller. The transfer may also be completed by the buyer. property The Transfer form (and others) are available in a PDF format on the LPI Between AUD 14,001 website at: and AUD 30,000, the fee is AUD 175 + 1.5% http://www.lpma.nsw.gov.au/land_property_information of excess over AUD 14,000 The forms are interactive with popup notes to assist with their completion. Between AUD 30,001 The contract is sent to the O ce of State Revenue and stamp duty is paid (by and AUD 80,000, the purchaser). If stamping of the Contract does not occur within 3 months of fee is AUD 415 + exchange penalty duty is payable on the amount of stamp duty payable at 1.75% of excess over the rate of 15.75% per annum. AUD 30,000 Between AUD 80,001 and AUD 300,000, Where the dutiable value of residential land exceeds AUD 3 million, the duty the fee is AUD 1,290 payable is: AUD 150,490 plus AUD 7 for every AUD 100, or part, that exceeds + 3.5% of excess over AUD 3 million. AUD 80,000 Between AUD 300,001 and Transfers also incur Fixed Stamp Duty costs totaling $20: $10 each for the 1,000,000, the fee is stamping of the Real Property Transfer (counterpart contract and Transfer AUD 8,990 + 4.5% of of Land form). excess over AUD 300,000 Between AUD 1,000,001 - 3,000,000, the fee is AUD 40,490 + 5.5% of excess over AUD 1,000,000 Over 3,000,000, the fee is AUD 150,490.00 + 7% of excess over AUD 3,000,000 Transfers also incur Fixed Stamp Duty costs totaling AUD 20 5 Notice of Sale, Transfer of Land form and Certi cate of Title are lodged 1 day—minutes AUD 219 for lodging with Land and Property Information by the buyer face to face, up to 2 a transfer of Agency : Land and Property Information Division (NSW) days bulk ownership lodgment. Notice The Transfer of Land form and Certi cate of Title (owner’s copy) are then can be submitted sent to the Land and Property Information Division for registration ("LPI"). online as well This form is used by LPI to notify the local council, water supply authority and relevant rating authorities of changes in ownership of the properties. Legislation requires this form to be lodged in all cases where the registered proprietor name on title changes, including a change of name. Customers are able to complete and lodge notices of sale (NOS) online using LPI’s electronic notice of sale form (eNOS) available online (https://shop.lpi.nsw.gov.au/wps/portal/enos/menu.pl) or hard copy Page 31   versions can be obtained from our Sydney o ce or law stationers. Once a costs totaling AUD Doing Business 2018 Australia 20 5 Notice of Sale, Transfer of Land form and Certi cate of Title are lodged 1 day—minutes AUD 219 for lodging with Land and Property Information by the buyer face to face, up to 2 a transfer of Agency : Land and Property Information Division (NSW) days bulk ownership lodgment. Notice The Transfer of Land form and Certi cate of Title (owner’s copy) are then can be submitted sent to the Land and Property Information Division for registration ("LPI"). online as well This form is used by LPI to notify the local council, water supply authority and relevant rating authorities of changes in ownership of the properties. Legislation requires this form to be lodged in all cases where the registered proprietor name on title changes, including a change of name. Customers are able to complete and lodge notices of sale (NOS) online using LPI’s electronic notice of sale form (eNOS) available online (https://shop.lpi.nsw.gov.au/wps/portal/enos/menu.pl) or hard copy versions can be obtained from our Sydney o ce or law stationers. Once a dealing is registered the local council, water supply authority and relevant rating authorities are automatically informed of the change and their records are updated. Takes place simultaneously with previous procedure. Details – Registering Property in Australia – Measure of Quality Answer Score Quality of the land administration index (0-30) 20.0 Reliability of infrastructure index (0-8) 7.0 What is the institution in charge of immovable property registration? Land and Property Information (New South Wales) In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Land and Property Information (New South Wales) In what format are the majority of maps of land plots kept in the largest business city— Computer/Fully 2.0 in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Page 32   Takes place simultaneously with previous procedure. Doing Business 2018 Australia Details – Registering Property in Australia – Measure of Quality Answer Score Quality of the land administration index (0-30) 20.0 Reliability of infrastructure index (0-8) 7.0 What is the institution in charge of immovable property registration? Land and Property Information (New South Wales) In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Land and Property Information (New South Wales) In what format are the majority of maps of land plots kept in the largest business city— Computer/Fully 2.0 in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 3.5 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://www.lpi.ns w.gov.au/plan_an d_title_registrati on/plan_and_dea ling_statistics Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: http://www.lpi.ns Page 33   w.gov.au/__data/ immovable property registration in the largest business city made publicly available– and if Doing so, how? 2018 Business Australia Link for online access: http://www.lpi.ns w.gov.au/__data/ assets/pdf_ le/0 009/203121/2015 _06_LPI_fee_chan ges_from_1_July_ 2015.pdf Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2015: 218256.0 Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, online 0.5 —and if so, how? Link for online access: https://shop.lpi.n sw.gov.au/wps/p ortal/lpma/lpi- shop/searches/p roducts/ut/p/b1/ 04_SjzQ0NjAyM7 ewNLHUj9CPykss y0xPLMnMz0vMA fGjzOKDnZxCTR0 NzQwNzJ1dDDw NzfxMnEMNvXxD DfWDU_P0c6McF QF8YWVk/# Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Page 34   Geographic Doing coverage Business (0–8) indexAustralia 2018 4.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 5.5 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Lawyer. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Lawyer. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a Supreme Court property worth 50 times gross national income (GNI) per capita and located in the of New South largest business city, what court would be in charge of the case in the rst instance? Wales How long does it take on average to obtain a decision from the rst-instance court for Between 1 and 2 2.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 35   Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Australia Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. OECD high OECD high Indicator Australia income income Overall Best Performer Strength of legal rights index (0-12) 11 6.0 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 6.6 6.6 8.00 (34 Economies) Page 36   Credit registry coverage (% of adults) 0.0 18.3 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Australia OECD high OECD high Indicator Australia income income Overall Best Performer Strength of legal rights index (0-12) 11 6.0 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 6.6 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 18.3 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 100.0 63.7 63.7 100.00 (23 Economies) Figure – Getting Credit in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 95.00: United States (Rank: 2) 90.00: Australia (Rank: 6) 85.00: Canada (Rank: 12) 63.03: Regional Average (OECD high income) 55.00: Japan (Rank: 77) 100.00: New Zealand (Rank: 1) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Australia and comparator economies 14 12 12 11 11 10 9 Index score 8 6.0 6 5 4 2 0 Australia Canada Japan New Zealand United States OECD high income Details – Legal Rights in Australia Strength of legal rights index (0-12) 11 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Page 37   Australia Canada Japan New Zealand United States OECD high income Doing Business 2018 Australia Details – Legal Rights in Australia Strength of legal rights index (0-12) 11 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be Yes performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Australia and comparator economies 10 8 8 8 8 7 6.6 Index score 6 6 4 2 0 Australia Canada Japan New Zealand United States OECD high income Details – Credit Information in Australia Page 38   0 Australia Doing Business 2018 Canada Australia Japan New Zealand United States OECD high income Details – Credit Information in Australia Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? No No 0 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes No 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 18,423,000 0 Number of firms 5,562,000 0 Total 23,985,000 0 Percentage of adult population 100.0 0.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 39   transactions; Available legal remedies (damages, Percentage of adult population 100.0 0.0 Doing Business 2018 Australia Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. OECD high OECD high Indicator Australia income income Overall Best Performer Extent of conflict of interest regulation index (0- 6 6.4 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6 6.4 6.4 Page 40   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Australia OECD high OECD high Indicator Australia income income Overall Best Performer Extent of conflict of interest regulation index (0- 6 6.4 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6 6.4 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 81.67: New Zealand (Rank: 2) 78.33: Canada (Rank: 8) 64.67: United States (Rank: 42) 63.93: Regional Average (OECD high income) 60.00: Australia (Rank: 57) 58.33: Japan (Rank: 62) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Australia and comparator economies – Measure of Quality Australia 9 2 8 4 5 8 Canada 8 9 8 7 6 9 Japan 5 6 7 3 6 8 New Zealand 7 9 10 7 7 9 United States 5.4 8.6 7.4 4.4 4 9 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 0 10 20 30 40 50 60 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Australia – Measure of Quality Answer Score Page 41   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Australia Details – Protecting Minority Investors in Australia – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6 Extent of disclosure index (0-10) 8 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 1.0 the transaction only Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 1.0 2) the transaction only Extent of director liability index (0-10) 2 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Not liable 0.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by No 0.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of 0.0 fraud or bad faith Ease of shareholder suits index (0-10) 8 Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without Yes 1.0 identifying speci c ones? (0-1) Page 42   Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 Doing Business 2018 Australia document Can the plainti request categories of documents from the defendant without Yes 1.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 6 Extent of shareholder rights index (0-10) 5 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 4 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 Page 43   Buyer pay declared MustBusiness Doing dividends within a maximum period set by law? 2018 Australia No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 9 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? No 0.0 Assuming that Buyer is a limited company, can members representing 5% put items on Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, Page 44   and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Australia Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) Post ling Index leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. OECD high OECD high Indicator Australia income income Overall Best Performer Payments (number per year) 11 10.9 10.9 3 (Hong Kong SAR, China) Page 45   return, but within the tax assessment period. Doing Business 2018 Australia OECD high OECD high Indicator Australia income income Overall Best Performer Payments (number per year) 11 10.9 10.9 3 (Hong Kong SAR, China) Time (hours per year) 105 160.7 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 47.5 40.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 95.34 83.45 83.45 99.38 (Estonia) Figure – Paying Taxes in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 91.08: New Zealand (Rank: 9) 88.05: Canada (Rank: 16) 85.62: Australia (Rank: 26) 84.13: United States (Rank: 36) 83.07: Regional Average (OECD high income) 76.71: Japan (Rank: 68) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Australia and comparator economies – Measure of Quality 120 95.34 96.90 94.04 100 83.45 80 73.23 71.69 Index score 60 40 20 0 Australia Canada Japan New Zealand United States OECD high income Details – Paying Taxes in Australia Tax or Total tax and mandatory Payments Notes on Time contribution rate Notes contribution (number) Payments (hours) Statutory tax rate Tax base (% of profit) on TTR Page 46   Corporate 1 Online 37 30% taxable profits 26.02 Doing Business 2018 Australia Figure – Paying Taxes in Australia and comparator economies – Measure of Quality 120 95.34 96.90 94.04 100 83.45 80 73.23 71.69 Index score 60 40 20 0 Australia Canada Japan New Zealand United States OECD high income Details – Paying Taxes in Australia Tax or Total tax and mandatory Payments Notes on Time contribution rate Notes contribution (number) Payments (hours) Statutory tax rate Tax base (% of profit) on TTR Corporate 1 Online 37 30% taxable profits 26.02 income tax Superannuation 1 Online 18 9.5% gross salaries 10.72 guarantee Payroll tax 1 Online 5.45% total payroll 5.18 Worker's 1 3.489% gross salaries 4.17 compensation Fringe benefits 1 online 49% Grossedup 1.08 tax and taxable value of jointly fringe benefits Land tax 1 Online 100 plus 1.6 cents for unimproved land 0.11 each $A exceeding value $549,000 Municipal tax 1 Online fixed fee (A$3,725) 0.10 Tax on 1 9% insurance 0.10 insurance premium contracts Vehicle tax 1 fixed fee ($A896 for 0.05 each vehicle) Value added tax 1 Online 50 10% value added 0.00 not (GST) included Fuel tax 1 liters of fuel 0.00 small amount Totals 11 105 47.5 Page 47   Details – Paying Taxes in Australia – Tax by Type Totals 11 105 47.5 Doing Business 2018 Australia Details – Paying Taxes in Australia – Tax by Type Taxes by type Answer Profit tax (% of profit) 26.0 Labor tax and contributions (% of profit) 21.1 Other taxes (% of profit) 0.4 Details – Paying Taxes in Australia – Measure of Quality Answer Score Post ling index (0-100) 95.34 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process None Percentage of cases exposed to a VAT audit (%) 50% - 74% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 4.5 91 Time to obtain a VAT refund (weeks) 8.0 90.83 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 1.8 99.54 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The mostPage 48   recent a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Australia Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the Traffic delays and road police checks while shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 49   of agriculture or industry, national security agencies and any other Doing Business 2018 Australia government authorities. OECD high OECD high Indicator Australia income income Overall Best Performer Time to export: Border compliance (hours) 36 12.7 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 749 149.9 149.9 0.00 (19 Economies) Time to export: Documentary compliance 7 2.4 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 264 35.4 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 39 8.7 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 525 111.6 111.6 0.00 (27 Economies) Time to import: Documentary compliance 4 3.5 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 100 25.6 25.6 0.00 (30 Economies) Figure – Trading across Borders in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.92: Regional Average (OECD high income) 92.01: United States (Rank: 36) 88.36: Canada (Rank: 46) 86.51: Japan (Rank: 51) 84.63: New Zealand (Rank: 56) 70.65: Australia (Rank: 95) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Australia – Time and Cost Time Cost 45 749 800 39 40 700 36 35 600 525 30 Time (hours) Cost (USD) 500 25 400 20 264 300 15 200 10 7 100 4 100 5 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 50   Doing Business 2018 Australia Figure – Trading across Borders in Australia – Time and Cost Time Cost 45 749 800 39 40 700 36 35 600 525 30 Time (hours) Cost (USD) 500 25 400 20 264 300 15 200 10 7 100 4 100 5 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Australia Characteristics Export Import Product HS 02 : Meat and edible meat offal HS 8708: Parts and accessories of motor vehicles Trade partner Japan United States Border Sydney port Sydney port Distance (km) 15 15 Domestic transport time (hours) 4 4 Domestic transport cost (USD) 525 525 Details – Trading across Borders in Australia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 1.0 65.0 Export: Clearance and inspections required by agencies other than customs 4.5 184.0 Export: Port or border handling 30.0 500.0 Import: Clearance and inspections required by customs authorities 1.0 100.0 Import: Clearance and inspections required by agencies other than customs 2.0 0.0 Import: Port or border handling 36.0 425.0 Details – Trading across Borders in Australia – Trade Documents Export Import Bill of lading Bill of lading Export declaration Packing list Page 51   Domestic transport cost (USD) 525 525 Doing Business 2018 Australia Details – Trading across Borders in Australia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 1.0 65.0 Export: Clearance and inspections required by agencies other than customs 4.5 184.0 Export: Port or border handling 30.0 500.0 Import: Clearance and inspections required by customs authorities 1.0 100.0 Import: Clearance and inspections required by agencies other than customs 2.0 0.0 Import: Port or border handling 36.0 425.0 Details – Trading across Borders in Australia – Trade Documents Export Import Bill of lading Bill of lading Export declaration Packing list Invoice Import declaration Health permit Certificate of origin Packing list Treatment Certificate Certificate of origin SOLAS certificate SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita Page 52   or the Enforcement fees SOLAS certificate Doing Business 2018 Australia Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value AUD 132,591.00 Court name District Court of New South Wales City Covered Sydney OECD high OECD high Indicator Australia income income Overall Best Performer Time (days) 402 577.8 577.8 164.00 (Singapore) Cost (% of claim value) 23.2 21.5 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 15.5 11.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 79.00: Australia (Rank: 3) 72.61: United States (Rank: 16) 71.48: New Zealand (Rank: 21) Page 53   of judicial processes Quality Business Doing index (0-18) 2018 Australia 15.5 11.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 79.00: Australia (Rank: 3) 72.61: United States (Rank: 16) 71.48: New Zealand (Rank: 21) 66.76: Regional Average (OECD high income) 65.26: Japan (Rank: 51) 54.35: Canada (Rank: 114) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Australia – Time and Cost Time Cost 1000 35 910 30.5 27.2 30 Cost (% of claim value) 800 23.2 23.4 25 22.3 21.5 577.8 Time (days) 600 20 402 420 360 15 400 216 10 200 5 0 0 Australia Canada Japan New Zealand OECD high income United States Figure – Enforcing Contracts in Australia and comparator economies – Measure of Quality Australia 2.5 5.5 3 4.5 Canada 2 2 1 4.5 Japan 2.5 1 1 3 New Zealand 2 3 1.5 3 United States 2.5 4.7 2.2 4.4 OECD high income 2.5 2.9 2 3.6 0 2 4 6 8 10 12 14 16 Page 54   18 0 0 Australia Canada Japan New Zealand OECD high income United States Doing Business 2018 Australia Figure – Enforcing Contracts in Australia and comparator economies – Measure of Quality Australia 2.5 5.5 3 4.5 Canada 2 2 1 4.5 Japan 2.5 1 1 3 New Zealand 2 3 1.5 3 United States 2.5 4.7 2.2 4.4 OECD high income 2.5 2.9 2 3.6 0 2 4 6 8 10 12 14 16 18 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Australia Indicator Time (days) 402 Filing and service 14 Trial and judgment 328 Enforcement of judgment 60 Cost (% of claim value) 23.2 Attorney fees 18.5 Court fees 4.5 Enforcement fees 0.2 Quality of judicial processes index (0-18) 15.5 Court structure and proceedings (-1-5) 4.5 Case management (0-6) 5.5 Court automation (0-4) 3.0 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Australia – Measure of Quality Page 55   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 Australia Details – Enforcing Contracts in Australia – Measure of Quality Answer Score Quality of judicial processes index (0-18) 15.5 Court structure and proceedings (-1-5) 4.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 5.5 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.5 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 3. Can two of the following four reports be generated about the competent court: (i) Yes 1.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by lawyers? Court automation (0-4) 3.0 1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 56   1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 Businesscourt? the competent Doing 2018 Australia 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the Yes general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 57   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Australia Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) OECD high OECD high Indicator Australia income income Overall Best Performer Recovery rate (cents on the dollar) 82.5 71.2 71.2 93.1 (Norway) Time (years) 1.0 1.7 1.7 0.4 (Ireland) Page 58   Cost (% of estate) 8.0 9.1 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Australia OECD high OECD high Indicator Australia income income Overall Best Performer Recovery rate (cents on the dollar) 82.5 71.2 71.2 93.1 (Norway) Time (years) 1.0 1.7 1.7 0.4 (Ireland) Cost (% of estate) 8.0 9.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 1 .. .. .. concern) Strength of insolvency framework index (0-16) 11.0 12.1 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Australia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.44: Japan (Rank: 1) 91.07: United States (Rank: 3) 81.46: Canada (Rank: 11) 78.79: Australia (Rank: 18) 76.12: Regional Average (OECD high income) 71.85: New Zealand (Rank: 32) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Australia – Time and Cost Time Cost 1.8 1.7 12 1.6 10.0 9.1 10 1.4 1.3 8.0 Cost (% of estate) 1.2 8 Time (years) 1.0 7.0 1.0 1 0.8 6 0.8 0.6 4.2 0.6 3.5 4 0.4 2 0.2 0 0 Australia Canada Japan New Zealand OECD high income United States Figure – Resolving Insolvency in Australia and comparator economies – Measure of Quality Australia 5 2.5 3 0.5 Page 59   0 0 Australia Canada Japan New Zealand OECD high income United States Doing Business 2018 Australia Figure – Resolving Insolvency in Australia and comparator economies – Measure of Quality Australia 5 2.5 3 0.5 Canada 4.5 2.5 3 1 Japan 6 3 2 3 New Zealand 3 3 2 0.5 United States 6 3 3 3 OECD high income 5.4 2.8 2.3 1.9 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Australia and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 100 92.4 87.5 84.2 90 82.5 82.1 80 71.2 70 60 50 40 30 20 10 0 Australia Canada Japan New Zealand United States OECD high income Details – Resolving Insolvency in Australia Indicator Answer Explanation Proceeding receivership BizBank is likely to move aggressively to enforce its security right and sell the assets. BizBank will likely be authorized under the loan agreement to ask the court to appoint a receiver, who Page 60   Australia Canada Japan New Zealand United States OECD high income Doing Business 2018 Australia Details – Resolving Insolvency in Australia Indicator Answer Explanation Proceeding receivership BizBank is likely to move aggressively to enforce its security right and sell the assets. BizBank will likely be authorized under the loan agreement to ask the court to appoint a receiver, who will then take control of the pledged assets. As Mirage will have no other assets left, this will results in the appointment of a liquidator to the company, and the receiver and the liquidator will proceed concurrently. Outcome going concern The receiver will take the maximum efforts to sell the hotel as a going concern, because that is the best way to maximize the proceeds of the sale. If the hotel is sold, this will allow the business to continue trading under different ownership. Time (in years) 1.0 It takes 12 months to complete the receivership procedure in Australia. As a first step, BizBank will ask the court to appoint a receiver, who will take control of the business/assets. The receiver will evaluate the company's financials to determine whether continuous operations are possible or whether Mirage's business should be terminated. Most likely, it will be possible to keep Mirage operating, so the receiver will make arrangement to continue and possibly improve the performance of the business. In the meantime, the receiver will look for a buyer willing to purchase the hotel as a going concern. After the sale of the business, the receiver will remit the payment to the secured creditor. Cost (% of 8.0 The cost of the procedure will amount to approximately 8% of the value of the hotel. Major estate) expenses will include attorneys' fees (around 2.5%), remuneration of the receiver (around 4.5%), and other fees (around 1%), including court fees, real estate agents' fees and marketing costs. Recovery rate (cents on the 82.5 dollar) Details – Resolving Insolvency in Australia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 11.0 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 5.0 Page 61   Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 dollar) Doing Business 2018 Australia Details – Resolving Insolvency in Australia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 11.0 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 5.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit Yes 1.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over 1.0 ordinary unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 0.5 Which creditors vote on the proposed reorganization plan? (a) All creditors 0.5 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 3.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Page 62   Creditor Doing participation Business 2018 index (0-4) Australia 3.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request Yes 1.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for Page 63   work of equal value and nondiscrimination based on the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Australia Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Australia Answer Hiring Page 64   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Australia Details – Labor Market Regulation in Australia Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 2068.3 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) 6.0 Working hours Standard workday 7.6 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 25.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 20.0 Paid annual leave for a worker with 5 years of tenure (working days) 20.0 Paid annual leave for a worker with 10 years of tenure (working days) 20.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 20.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? Yes Page 65   Third-party Doing approval Business 2018 if nine workers are dismissed? Australia No Retraining or reassignment obligation before redundancy? Yes Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 2.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 3.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure 4.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure 10.0 Severance pay for redundancy dismissal for a worker with 10 years of tenure 12.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 8.7 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 126.0 Receive 100% of wages on maternity leave? No Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 0.0 Business Reforms in Australia In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Australia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2014 Getting Credit: Australia improved its credit information system through the Privacy Amendment (Enhancing Privacy Protection) Act 2012, which permits credit bureaus to collect account payment history with improved privacy protection. DB2013 Getting Credit: Australia strengthened its secured transactions system by adopting a new national legal regime governing the enforceability of security interests in personal property and implementing a uni ed collateral registry. Page 66   Minimum contribution period for unemployment protection (months)? 0.0 Doing Business 2018 Australia Business Reforms in Australia In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Australia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2014 Getting Credit: Australia improved its credit information system through the Privacy Amendment (Enhancing Privacy Protection) Act 2012, which permits credit bureaus to collect account payment history with improved privacy protection. DB2013 Getting Credit: Australia strengthened its secured transactions system by adopting a new national legal regime governing the enforceability of security interests in personal property and implementing a uni ed collateral registry. DB2012 Resolving Insolvency: Australia clari ed the priority of claims of unsecured creditors over all shareholders’ claims and introduced further regulation of the profession of insolvency practitioners. DB2011 Labor Market Regulation: Australia introduced the severance payment obligation and reemployment consideration applicable in cases of redundancy dismissals. Annual leave was increased and averaging of hours is now allowed in shorter periods of time. In addition, notice period applicable in case of redundancy dismissals was decreased. DB2010 Dealing with Construction Permits: Australia reduced the time needed for dealing with construction permits by streamlining procedures. Paying Taxes: Australia made paying taxes easier for companies by abolishing the stamp duty on contracts. DB2008 Starting a Business: Australia made starting a business less costly by cutting the registration fee for new businesses by half. Page 67   DB2008 Starting Doing a Business: Business 2018 Australia made starting a business less costly by cutting the registration fee for new businesses by half. Australia Page 68