Doing Business 2020 Australia Economy Profile Australia Page 1 Doing Business 2020 Australia Economy Profile of Australia Doing Business 2020 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 permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and 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, total tax and contribution rate for a firm to comply with all tax regulations as well as postfiling 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 Employing workers Flexibility in employment regulation and redundancy cost Page 2 Doing Business 2020 Australia 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 firms. 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 employing workers. Although Doing Business does not present rankings of economies on the employing workers indicators or include the topic in the aggregate ease of doing business 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 efficient regulation; offers 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 offers detailed subnational studies, which exhaustively cover business regulation and reform in different cities and regions within a nation. These studies 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 first Doing Business study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study 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 benefited 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. To learn more about Doing Business please visit doingbusiness.org Page 3 Doing Business 2020 Australia Ease of Doing Business in DB RANK DB SCORE Region OECD high income Australia Income Category High income 14 Population 24,992,369 81.2 City Covered Sydney Rankings on Doing Business topics - Australia 7 4 6 11 20 28 42 57 62 106 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 Topic Scores 96.6 84.7 82.3 75.7 95.0 64.0 85.7 70.3 79.0 78.9 Starting a Business (rank) 7 Getting Credit (rank) 4 Trading across Borders (rank) 106 Score of starting a business (0-100) 96.6 Score of getting credit (0-100) 95.0 Score of trading across borders (0-100) 70.3 Procedures (number) 3 Strength of legal rights index (0-12) 11 Time to export Time (days) 2 Depth of credit information index (0-8) 8 Documentary compliance (hours) 7 Cost (number) 0.7 Credit registry coverage (% of adults) 0.0 Border compliance (hours) 36 Paid-in min. capital (% of income per capita) 0.0 Credit bureau coverage (% of adults) 100.0 Cost to export Documentary compliance (USD) 264 Dealing with Construction Permits (rank) 11 Protecting Minority Investors (rank) 57 Border compliance (USD) 766 Score of dealing with construction permits (0-100) 84.7 Score of protecting minority investors (0-100) 64.0 Time to export Procedures (number) 11 Extent of disclosure index (0-10) 8.0 Documentary compliance (hours) 4 Time (days) 120.5 Extent of director liability index (0-10) 2.0 Border compliance (hours) 39 Cost (% of warehouse value) 0.6 Ease of shareholder suits index (0-10) 8.0 Cost to export Building quality control index (0-15) 14.0 Extent of shareholder rights index (0-6) 4.0 Documentary compliance (USD) 100 Extent of ownership and control index (0-7) 3.0 Border compliance (USD) 539 Getting Electricity (rank) 62 Extent of corporate transparency index (0-7) 7.0 Score of getting electricity (0-100) 82.3 Enforcing Contracts (rank) 6 Procedures (number) 5 Paying Taxes (rank) 28 Score of enforcing contracts (0-100) 79.0 Time (days) 75 Score of paying taxes (0-100) 85.7 Time (days) 402 Cost (% of income per capita) 12.1 Payments (number per year) 11 Cost (% of claim value) 23.2 Reliability of supply and transparency of tariff index (0-8) 7 Time (hours per year) 105 Quality of judicial processes index (0-18) 15.5 Total tax and contribution rate (% of profit) 47.4 Registering Property (rank) 42 Postfiling index (0-100) 95.3 Resolving Insolvency (rank) 20 Score of registering property (0-100) 75.7 Score of resolving insolvency (0-100) 78.9 Procedures (number) 4 Recovery rate (cents on the dollar) 82.7 Time (days) 4.5 Time (years) 1.0 Cost (% of property value) 5.4 Cost (% of estate) 8.0 Quality of the land administration index (0-30) 19.5 Outcome (0 as piecemeal sale and 1 as going 1 concern) Strength of insolvency framework index (0-16) 11.0 Page 4 Doing Business 2020 Australia Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each 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 the 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 ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate a company To make the data comparable across economies, several assumptions about the business and the (number) procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business city -Is a limited liability company (or its legal equivalent). If there is more than one type of limited • Postregistration (for example, social security registration, liability company in the economy, the limited liability form most common among domestic firms is company seal) chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office. • Obtaining approval from spouse to start a business or to leave -Operates in the economy’s largest business city. For 11 economies the data are also collected for the home to register the company the second largest business city. • Obtaining any gender specific document for company -Performs general industrial or commercial activities such as the production or sale to the public of registration and operation or national identification card goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily Time required to complete each procedure (calendar days) polluting production processes. • Does not include time spent gathering information -Does not qualify for investment incentives or any special benefits. -Is 100% domestically owned. • Each procedure starts on a separate day (2 procedures cannot -Has five business owners, none of whom is a legal entity. One business owner holds 30% of the start on the same day) company shares, two owners have 20% of shares each, and two owners have 15% of shares • Procedures fully completed online are recorded as ½ day each. -Is managed by one local director. • Procedure is considered completed once final document is -Has between 10 and 50 employees one month after the commencement of operations, all of them received domestic nationals. • No prior contact with officials -Has start-up capital of 10 times income per capita. -Has an estimated turnover of at least 100 times income per capita. Cost required to complete each procedure (% of income per -Leases the commercial plant or offices and is not a proprietor of real estate. capita) -Has an annual lease for the office space equivalent to one income per capita. • Official costs only, no bribes -Is in an office space of approximately 929 square meters (10,000 square feet). -Has a company deed that is 10 pages long. • No professional fees unless services required by law or commonly used in practice The owners: Paid-in minimum capital (% of income per capita) -Have reached the legal age of majority and are capable of making decisions as an adult. If there • Funds deposited in a bank or with third party before registration is no legal age of majority, they are assumed to be 30 years old. or up to 3 months after incorporation -Are in good health and have no criminal record. -Are married, the marriage is monogamous and registered with the authorities. -Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population. Page 5 Doing Business 2020 Australia Starting a Business - Australia Standardized Company Legal form Proprietary Company (Pty Ltd) Paid-in minimum capital requirement No minimum City Covered Sydney Indicator Australia OECD high income Best Regulatory Performance Procedure – Men (number) 3 4.9 1 (2 Economies) Time – Men (days) 2 9.2 0.5 (New Zealand) Cost – Men (% of income per capita) 0.7 3.0 0.0 (2 Economies) Procedure – Women (number) 3 4.9 1 (2 Economies) Time – Women (days) 2 9.2 0.5 (New Zealand) Cost – Women (% of income per capita) 0.7 3.0 0.0 (2 Economies) Paid-in min. capital (% of income per capita) 0.0 7.6 0.0 (120 Economies) Figure – Starting a Business in Australia – Score 88.2 98.5 99.7 100.0 Procedures Time Cost Paid-in min. capital Figure – Starting a Business in Australia and comparator economies – Ranking and Score DB 2020 Starting a Business Score 0 100 98.2: Canada (Rank: 3) 96.6: Australia (Rank: 7) 94.6: United Kingdom (Rank: 18) 91.3: Regional Average (OECD high income) 86.1: Japan (Rank: 106) 100: New Zealand (Rank: 1) Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2020 Australia Figure – Starting a Business in Australia – Procedure, Time and Cost Time (days) Cost (% of income per capita) 2 0.8 0.7 Cost (% of income per capita) 1.5 0.6 Time (days) 0.5 1 0.4 0.3 0.5 0.2 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 different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2020 Australia Details – Starting a Business in Australia – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Complete and lodge ASIC Form 201 “Application for Registration as an Australian Less than one day AUD 488 Company"; Obtain a certificate of incorporation and an Australian company number (ACN) (online procedure) Agency : Australian Business Registration Service (BRS) 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. 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 office 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 confirm the availability of the proposed company name. If no name is specified, the company will simply be referred to by its Australian Company Number ("ACN"). Upon incorporation, ASIC will issue to the company a certificate of incorporation, which evidenced that the company has been incorporated on and from the date of issue. Since June 2018, the Business Registration Service (BRS) has been available to the public which allows to register for Australian Company Number (ACN) and other services online. Beta-version of the platform was tested from April 2017, before the formal launch in June 2018. The majority of entrepreneurs are now using this platform for obtaining Australian Company Number (ACN). 2 Register for ABN with the Australian Taxation Office (ATO) Less than one day no charge Agency : Australian Taxation Office (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 different 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 profit). 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. A public officer must be appointed upon registration, to deal with the company's tax affairs. -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 differing 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). Page 8 Doing Business 2020 Australia 3 Sign up for Worker Compensation Insurance at an insurance agency 1 day no charge Agency : State Insurance Regulatory Authority (SIRA) 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. Insurance & Care NSW (icare) was created on September 1, 2015 to provide administration of workers compensation insurance services in NSW. Depending on the size of the business and type of main activity, there may be differences of how a policy is calculated. On February 28, 2017 icare launched an online platform service for workers insurance, where employers can get a quote and purchase a policy online. To get a quote online the following information is needed: -General details about your business (eg. legal name, ABN, postal and operating addresses, and contact details). -A start date for the policy -The type of business -Details of past workers compensation insurance -The number of workers you employ -An estimate of wages paid to workers. More information is available at: https://www.icare.nsw.gov.au/employers/take-out-a- policy/workers-insurance-policies/ Takes place simultaneously with previous procedure. Page 9 Doing Business 2020 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 notifications, 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 certification requirements. The most recent round of data collection was completed in May 2019. 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 connections are used. • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates The construction company (BuildCo): • Submitting all required notifications and receiving all necessary - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest inspections business city. For 11 economies the data are also collected for the second largest business city. • Obtaining utility connections for water and sewerage - Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects • Registering and selling the warehouse after its completion or engineers. BuildCo is not assumed to have any other employees who are technical or licensed Time required to complete each procedure (calendar days) experts, such as geological or topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse upon its • Does not include time spent gathering information completion. • Each procedure starts on a separate day—though procedures The warehouse: that can be fully completed online are an exception to this rule - Will be used for general storage activities, such as storage of books or stationery. • Procedure is considered completed once final document is received - Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be • No prior contact with officials located on a land plot of 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 income per - Will have complete architectural and technical plans prepared by a licensed architect. If capita) preparation of the plans requires such steps as obtaining further documentation or getting prior • Official costs only, no bribes approvals from external agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory Building quality control index (0-15) 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 tap. If there is no water • Quality control during construction (0-3) delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control after construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow • Liability and insurance regimes (0-2) of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and • Professional certifications (0-4) a peak wastewater flow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 10 Doing Business 2020 Australia Dealing with Construction Permits - Australia Standardized Warehouse Estimated value of warehouse AUD 3,580,448.60 City Covered Sydney Indicator Australia OECD high income Best Regulatory Performance Procedures (number) 11 12.7 None in 2018/19 Time (days) 120.5 152.3 None in 2018/19 Cost (% of warehouse value) 0.6 1.5 None in 2018/19 Building quality control index (0-15) 14.0 11.6 15.0 (6 Economies) Figure – Dealing with Construction Permits in Australia – Score 76.0 72.8 96.9 93.3 Procedures Time Cost Building quality control index Figure – Dealing with Construction Permits in Australia and comparator economies – Ranking and Score DB 2020 Dealing with Construction Permits Score 0 100 86.5: New Zealand (Rank: 7) 84.7: Australia (Rank: 11) 83.1: Japan (Rank: 18) 80.3: United Kingdom (Rank: 23) 75.6: Regional Average (OECD high income) 73.0: Canada (Rank: 64) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Page 11 Doing Business 2020 Australia Figure – Dealing with Construction Permits in Australia – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 120 0.25 Cost (% of warehouse value) 100 0.2 80 Time (days) 0.15 60 0.1 40 0.05 20 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 different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 12 Doing Business 2020 Australia Figure – Dealing with Construction Permits in Australia and comparator economies – Measure of Quality 16 15.0 14.0 14.0 14 13.0 11.6 12 Index score 10 9.0 8 6 4 2 0 Australia Canada Japan New United OECD Zealand Kingdom high income Details – Dealing with Construction Permits in Australia – Procedure, Time and Cost No. Procedures 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 - affect the proposed development. BuildCo should ensure that the relevant planning controls have been identified and satisfied. 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 certificates or approvals. These will add cost and time. The council's local environment plan (LEP) usually identifies 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. Page 13 Doing Business 2020 Australia 3 File development application with consent authority 49 days AUD 6,866 Agency : Local Council It is a legal requirement to submit digital copies of plans and the following supporting documentation - A4 plan for notification purposes (3 copies) - Survey plan (7 copies + 3 A4 copies) - Site plan (7 copies + 3 A4 copies) - Floor plan (existing and proposed), elevation plan, section plan, shadow diagrams, subdivision plan, landscaping plan (7 copies + 3 A4 copies each) - Model - Computer model - Efficient use of resources commitment table (7 copies) - green star rating - Basix certiciate (2 copies) - Design excellence map - Exceptions to development standards (if applicable - 7 copies each) - Statement of environmental effects (7 copies including 1 unbound copy) - Erosion and sediment control plan (7 copies) - Stormwater managemenet plan (7 copies) - Waste management plan (7 copies including 1 unbound copy), 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 certificate to be issued. 4 Apply for a construction certificate 21 days AUD 7,622 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 and obtain a Construction Certificate. This certificate states that building work may commence on an approved development, and complies with the terms of the Development Consent and the Building Code of Australia. Construction Certificates are either issued by Council, or independent accredited certifiers (PCA - Principle Certifying Authorities). A Construction Certificate cannot be issued without obtaining prior development consent for that development. Items required include: - Development consent compliance statement (5 copies) - Plans (5 copies) - Colored plans (5 copies) - Survey plans (5 copies) - Site plan (5 copies) - Floor plan (5 copies) - Elevation plan (5 copies) - Section plan (5 copies) - Specifications (2 copies) - Fire safety measures schedule (5 copies) - Home Building Act requirements 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 Quick Check Agent 0.5 days AUD 66 Agency : Sydney Water Before any construction work can be done, BuildCo must request connection and building plan approvals, service plans and diagrams online using Sydney Water Tap In website or by visiting the Sydney Water Quick Check Agent to verify that the proposed building work will not affect a Sydney Water asset (water supply pipe and/or drainage pipe). 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 identified) or submit dimensions using the online tool of the Sydney Water Tap In website: https://www.sydneywater.com.au/tapin/index.htm Page 14 Doing Business 2020 Australia 6 Notify Hill Shire City Council of Commencement of work and appoint Hill Shire City Council 1 day no charge as PCA Agency : Hill Shire City Council Under s 4.5 of the amended Environmental Planning and Assessment Act 1979, the council of the area in which the development is to be carried out will be the consent authority. Build Co needs to notify the Hill Shire City Council of the Council's appointment as the principal certifier (technically, their surveyors 'Hills Certifiers' would be appointed), and of Build Co's intention to commence the erection of the building, no later than 2 days before the building work commences 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 500 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 certificate, 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 certificate can be issued in relation to the building 8 Receive inspection prior to covering any stormwater drainage connections 1 day AUD 500 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 Certificate. 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 first select a water-servicing coordinator. The coordinator requests a Section 73 Compliance Certificate (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 specifies charges to be paid and the project to be built. If construction is required, certification 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 certificate. 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 certificate 1 day AUD 1,000 Agency : Hill Shire City Council The authority that has approved the development may monitor the finished development to ensure compliance with laws and local planning policies. If the development does not comply with the development consent, the applicant can be fined (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 offences. 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 certificate) has not been obtained where required; or (b) if there has been non- compliance with the conditions of a relevant approval. An occupation certificate can be requested using the application form available on the Hill Shire City Council website. Page 15 Doing Business 2020 Australia 11 Receive final inspection by PCA and obtain the final occupation certificate (OC) 15 days AUD 500 Agency : Hill Shire City Council An occupation certificate 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 certificate verifies that the PCA is satisfied 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 certificates: • A final occupation certificate 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 certificate 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 certificate is required for any new building work or change of use of a building that has a development consent or a complying development certificate under the EP&A Act. Takes place simultaneously with previous procedure. Page 16 Doing Business 2020 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; Free 1.0 of charge. Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 1.0 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 compliance with existing Licensed architect; 1.0 building regulations? (0-1) Licensed engineer; Private firm. Quality control during construction index (0-3) 3.0 What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections by 2.0 external engineer or firm; 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 final inspection required by law to verify that the building was built in accordance with the approved Yes, external 2.0 plans and regulations? (0-2) engineer submits report for final inspection. Do legally mandated final 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 flaws or problems in the building once it is in use Architect or engineer; 1.0 (Latent Defect Liability or Decennial Liability)? (0-1) Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or No party is required 0.0 problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) by law to obtain insurance . Professional certifications index (0-4) 4.0 What are the qualification requirements for the professional responsible for verifying that the architectural plans Minimum number of 2.0 or drawings are in compliance with existing building regulations? (0-2) years of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certification exam. What are the qualification requirements for the professional who supervises the construction on the ground? (0- Minimum number of 2.0 2) years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. Page 17 Doing Business 2020 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 tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection (number) To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining all necessary clearances and permits The warehouse: • Completing all required notifications and receiving all necessary - Is owned by a local entrepreneur and is used for storage of goods. inspections - Is located in the economy’s largest business city. For 11 economies the data are also collected for • Obtaining external installation works and possibly purchasing the second largest business city. material for these works - Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway. • Concluding any necessary supply contract and obtaining final - Is a new construction and is being connected to electricity for the first time. supply - Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square Time required to complete each procedure (calendar days) feet). The plot of land on which it is built is 929 square meters (10,000 square feet). • Is at least 1 calendar day The electricity connection: • Each procedure starts on a separate day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- • Does not include time spent gathering information kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW). - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution • Reflects the time spent in practice, with little follow-up and no network and is either overhead or underground, whichever is more common in the area where the prior contact with officials warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other Cost required to complete each procedure (% of income per owners’ private property because the warehouse has access to a road. capita) - Does not require work to install the internal wiring of the warehouse. This has already been • Official costs only, no bribes completed up to and including the customer’s service panel or switchboard and the meter base. • Value added tax excluded The monthly consumption: The reliability of supply and transparency of tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours • Duration and frequency of power outages (0–3) a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours • Tools to monitor power outages (0–1) (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier. - Tariffs effective in January of the current year are used for calculation of the price of electricity for • Regulatory monitoring of utilities’ performance (0–1) the warehouse. Although January has 31 days, for calculation purposes only 30 days are used. • Financial deterrents limiting outages (0–1) • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity. Page 18 Doing Business 2020 Australia Getting Electricity - Australia Standardized Connection Name of utility Ausgrid Price of electricity (US cents per kWh) 20.4 City Covered Sydney Indicator Australia OECD high income Best Regulatory Performance Procedures (number) 5 4.4 3 (28 Economies) Time (days) 75 74.8 18 (3 Economies) Cost (% of income per capita) 12.1 61.0 0.0 (3 Economies) Reliability of supply and transparency of tariff index (0-8) 7 7.4 8 (26 Economies) Figure – Getting Electricity in Australia – Score 66.7 75.2 99.9 87.5 Reliability of supply and transparency of Procedures Time Cost tariff index Figure – Getting Electricity in Australia and comparator economies – Ranking and Score DB 2020 Getting Electricity Score 0 100 96.9: United Kingdom (Rank: 8) 93.2: Japan (Rank: 14) 85.9: Regional Average (OECD high income) 84.0: New Zealand (Rank: 48) 82.3: Australia (Rank: 62) 63.8: Canada (Rank: 124) Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Figure – Getting Electricity in Australia – Procedure, Time and Cost Time (days) Cost (% of income per capita) 8 70 7 Cost (% of income per capita) 60 6 50 Time (days) 5 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 different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures Page 19 Doing Business 2020 Australia reflected here, see the summary below. Figure – Getting Electricity in Australia and comparator economies – Measure of Quality 9 8 8 8 7.4 7 7 7 6 Index score 6 5 4 3 2 1 0 Australia Canada Japan New United OECD Zealand Kingdom high income Page 20 Doing Business 2020 Australia Details – Getting Electricity in Australia – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit application to Ausgrid, receive job number and estimate and make payment 52 calendar days AUD 275 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 Offer - 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 offer. Once the connection offer 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 Identifier) 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 offer 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 Notification 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 confirmed 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 electrical 7 calendar days AUD 0 installation. Agency : Ausgrid The Electrical Contractor undertaking the electrical installation work associated with the premises submits a Certificate 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 flow 4 calendar days AUD 3,221 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 flowing. Takes place simultaneously with previous procedure. Page 21 Doing Business 2020 Australia Details – Getting Electricity in Australia – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 7 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 1.0 System average interruption frequency index (SAIFI) 0.6 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 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 reliability of supply? Yes Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online https://www.originenergy.c om.au/content/dam/origin/ business/Documents/ener gy-price-fact- sheets/nsw/1July2017/NS W_Electricity_Small%20B usiness_AusGrid_Standar d%20Published%20Rate. PDF Are customers notified of a change in tariff 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 tariff 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. Page 22 Doing Business 2020 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 five 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 May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable property To make the data comparable across economies, several assumptions about the parties to the (number) transaction, the property and the procedures are used. • Preregistration procedures (for example, checking for liens, The parties (buyer and seller): notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). • Registration procedures in the economy's largest business city. - Are located in the periurban (that is, on the outskirts of the city but still within its official limits) • Postregistration procedures (for example, filling title with area of the economy’s largest business city. For 11 economies the data are also collected for the municipality) second largest business city. - Are 100% domestically and privately owned. Time required to complete each procedure (calendar days) - Perform general commercial activities. • Does not include time spent gathering information The property (fully owned by the seller): • Each procedure starts on a separate day - though procedures - Has a value of 50 times income per capita, which equals the sale price. that can be fully completed online are an exception to this rule - Is fully owned by the seller. • Procedure is considered completed once final document is - Has no mortgages attached and has been under the same ownership for the past 10 years. received - Is registered in the land registry or cadastre, or both, and is free of title disputes. • No prior contact with officials - Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required. Cost required to complete each procedure (% of property - Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- value) story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, • Official costs only (such as administrative fees, duties and building codes and legal requirements. The property, consisting of land and building, will be taxes). transferred in its entirety. • Value Added Tax, Capital Gains Tax and illicit payments are - Will not be subject to renovations or additional construction following the purchase. excluded - Has no trees, natural water sources, natural reserves or historical monuments of any kind. - Will not be used for special purposes, and no special permits, such as for residential use, Quality of land administration index (0-30) industrial plants, waste storage or certain types of agricultural activities, are required. - Has no occupants, and no other party holds a legal interest in it. • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 23 Doing Business 2020 Australia Registering Property - Australia Indicator Australia OECD high income Best Regulatory Performance Procedures (number) 4 4.7 1 (5 Economies) Time (days) 4.5 23.6 1 (2 Economies) Cost (% of property value) 5.4 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 19.5 23.2 None in 2018/19 Figure – Registering Property in Australia – Score 75.0 98.3 64.3 65.0 Procedures Time Cost Quality of the land administration index Figure – Registering Property in Australia and comparator economies – Ranking and Score DB 2020 Registering Property Score 0 100 94.6: New Zealand (Rank: 2) 77.8: Canada (Rank: 36) 77.0: Regional Average (OECD high income) 75.7: Australia (Rank: 42) 75.7: United Kingdom (Rank: 41) 75.6: Japan (Rank: 43) Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Page 24 Doing Business 2020 Australia Figure – Registering Property in Australia – Procedure, Time and Cost Time (days) Cost (% of property value) 4.5 6 4 5 Cost (% of property value) 3.5 3 4 Time (days) 2.5 3 2 1.5 2 1 1 0.5 0 0 1 *2 3 4 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 different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 25 Doing Business 2020 Australia Figure – Registering Property in Australia and comparator economies – Measure of Quality 30 25.5 26.5 26.0 25 23.2 21.5 Index score 19.5 20 15 10 5 0 Australia Canada Japan New United OECD Zealand Kingdom high income Details – Registering Property in Australia – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain a zoning certificate from the Municipal Council 2 days AUD 53 Agency : Municipal Council (City of Sydney) The seller is responsible for obtaining a Zoning Certificate from the Municipal Council. This document must be attached to the Contract for Sale (prescribed documents). A Building Certificate 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 Certificates electronically. In the case of Sidney, it is possible to request a certificate online at https://online.cityofsydney.nsw.gov.au/Certificates, and it is possible to receive it by email. 2 Obtain a title search certificate through the information broker Less than one day, AUD 130.19; (Through Agency : Information broker online information brokers According to the Conveyancing Act 1919 and the Conveyancing (Sale of Land) Regulation 2017, the seller is responsible for obtaining a title search certificate, a copy of any easement or covenant A title search for the registered on title, a deposited plan and a land rates clearance certificate from the NSW Land property located in Registry Services. The seller also obtains a sewage service diagram from the local water authority. Sydney: AUD 24.50 A copy of any easement or If the seller or the seller's solicitor is doing the process online, they must use an approved covenant on the title: AUD information broker. 25.30 A deposited plan of the property: AUD 25.70 Land rate clearance certificate: AUD 27.55 Sewer service diagram: AUD 35.14 Water rate clearance certificate (Section 66 certificate): AUD 31.40) 3 Obtain an assessment for the stamp duty Less than one day, AUD 4; (Client Service Agency : Revenue NSW online Provider's service fee to To obtain an assessment of the stamp duty, Electronic Duties Returns (EDR) is used to access the online EDR: electronically assess and endorse a range of duties transactions. Client service providers of the AUD 4 (the fee differs by Revenue NSW provide the solicitor with access to the online EDR. A client service provider’s CSPs)) website is used for this assessment. After the solicitor fills the information in the online EDR, a Duties Notice of Assessment will be issued with the stamping reference number with the total tax payable and the due date for payment, and instantly sent to the solicitor by email. The reference number is used to make the payment, generally at the time of an electronic lodgment. The buyer’s solicitor retains the original buyer’s declaration and supporting documents on behalf of the Revenue NSW. Page 26 Doing Business 2020 Australia 4 Lodge the property transfer electronically 2 days AUD 191,383.14; (AUD Agency : NSW Land Registry Services (Concessionary for Office of the Registrar General) 129.10 for registering After July 1, 2018, the transfer must be lodged electronically via an Electronic Lodgment Network property transfer at NSW (ELN), under the Conveyancing Rules. Property Exchange Australia (PEXA) is the only ELN Land Registry Services operating in NSW as of May 2019. To conduct the electronic lodgment, each seller and buyer must use the service of a certified AUD121.50 for the solicitor or conveyancer. electronic lodgement by PEXA The solicitor prepares and reviews a contract for sales for the seller. The seller provides evidence to establish their right to deal in the land and the buyer provides the solicitor with details to enable Stamp duty, according to them to complete the Electronic Notice of Sale (ENOS). the following schedule of tariffs : The parties physically sign Client Authorisation Forms (CAF) and undertake Verification of Identity Below AUD 14,000, the (VOI) to provide the solicitor with the authority for the electronic lodgment. fee is 1.25% of property The seller’s and buyer’s solicitors fill the necessary information online within a digital ‘workspace’ value of property in the PEXA system. The buyer’s solicitor completes an electronic transfer form and Electronic Between AUD 14,001 and notice of sale ENOS. AUD 30,000, the fee is The stamping reference number obtained from the Revenue NSW will be required for the PEXA AUD 175 + 1.5% of excess workspace to make the payment of the stamp duty. over AUD 14,000 Between AUD 30,001 and Once the dealing is submitted, the registration will be completed almost immediately. A paper AUD 80,000, the fee is certificate of the new title will be issued to the new owner by postal delivery within two to three AUD 415 + 1.75% of working days. excess over AUD 30,000 Between AUD 80,001 and AUD 300,000, the fee is AUD 1,290 + 3.5% of excess over AUD 80,000 Between AUD 300,001 and 1,000,000, the fee is AUD 8,990 + 4.5% of 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 AUD 20.) Takes place simultaneously with previous procedure. Page 27 Doing Business 2020 Australia Details – Registering Property in Australia – Measure of Quality Answer Score Quality of the land administration index (0-30) 19.5 Reliability of infrastructure index (0-8) 7.0 Type of land registration system in the economy: Torrens System What is the institution in charge of immovable property registration? NSW Land Registry Services In what format are past and newly issued land records kept at the immovable property registry of the largest Computer/Scanned 1.0 business city of the economy —in a paper format or in a computerized format (scanned or fully digital)? Is there a comprehensive and functional 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: Spatial Services (New South Wales) In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business Computer/Fully digital 2.0 city of the economy—in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing cadastral information Yes 1.0 (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral or mapping agency Different databases 1.0 kept in a single database, in different but linked databases or in separate databases? but linked Do the immovable property registration agency and cadastral or mapping agency use the same identification Yes 1.0 number for properties? Transparency of information index (0–6) 3.0 Who is able to obtain information on land ownership at the agency in charge of immovable property registration Anyone who pays the 1.0 in the largest business city? official fee Is the list of documents that are required to complete any type of property transaction made publicly available– Yes, online 0.5 and if so, how? Link for online access: http://www.nswlrs.co m.au/forms/land_title _dealing_forms http://rg- guidelines.nswlrs.co m.au/land_dealings/d ealing_requirements/t ransfers/transfer Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable Yes, online 0.5 property registration in the largest business city made publicly available–and if so, how? Link for online access: https://www.nswlrs.co m.au/Fees Does the agency in charge of immovable property registration agency formally commit to deliver a legally No 0.0 binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard? Link for online access: Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agency No 0.0 in charge of immovable property registration? Contact information: Are there publicly available official statistics tracking the number of transactions at the immovable property No 0.0 registration agency? Number of property transfers in the largest business city in 2018: Who is able to consult maps of land plots in the largest business city? Anyone who pays the 0.5 official fee Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, online 0.5 Page 28 Doing Business 2020 Australia Link for online access: https://six.nsw.gov.au/ etopo https://www.nswlrs.co m.au/Fees Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and No 0.0 if so, how does it communicate the service standard? Link for online access: Is there a specific and independent mechanism for filing complaints about a problem that occurred at the No 0.0 cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the largest business city formally registered at the immovable property Yes 2.0 registry? Are all privately held land plots in the economy formally registered at the immovable property registry? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Are all privately held land plots in the economy mapped? No 0.0 Land dispute resolution index (0–8) 5.5 Does the law require that all property sale transactions be registered at the immovable property registry to make Yes 1.5 them opposable to third parties? Legal basis: Real Property Act 1900 - section 41 Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Type of guarantee: State guarantee Legal basis: Real Property Act 1900 - section 42 Is there a is a specific, out-of-court 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 certified by the immovable property registry? Legal basis: Real Property Act 1900 section 129 Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., Yes 0.5 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 verification of the identity of the parties to a property transaction? Yes 0.5 If yes, who is responsible for verifying the identity of the parties? Registrar; Lawyer; Is there a national database to verify the accuracy of government issued identity documents? No 0.0 What is the Court of first instance in charge of a case involving a standard land dispute between two local Supreme Court of businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located New South Wales in the largest business city? How long does it take on average to obtain a decision from the first-instance court for such a case (without Between 1 and 2 2.0 appeal)? years Are there publicly available statistics on the number of land disputes at the economy level in the first instance No 0.0 court? Number of land disputes in the economy in 2018: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 29 Doing Business 2020 Australia Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. 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 through 2 sets of indicators. The depth of credit • Rights of borrowers and lenders through collateral laws (0-10) information index measures rules and practices affecting the coverage, scope and accessibility of • Protection of secured creditors’ rights through bankruptcy laws credit information available through a credit registry or a credit bureau. The strength of legal rights (0-2) index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary Depth of credit information index (0–8) secured transactions system exists. Then two case scenarios, case A and case B, are used to • Scope and accessibility of credit information distributed by determine how a nonpossessory security interest is created, publicized and enforced according to credit bureaus and credit registries (0-8) the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest credit bureau In some economies the legal framework for secured transactions will allow only case A or case B as a percentage of adult population (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral. Credit registry coverage (% of adults) • Number of individuals and firms listed in credit registry as a Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: percentage of adult population - 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. Page 30 Doing Business 2020 Australia Getting Credit - Australia Indicator Australia OECD high income Best Regulatory Performance Strength of legal rights index (0-12) 11 6.1 12 (5 Economies) Depth of credit information index (0-8) 8 6.8 8 (53 Economies) Credit registry coverage (% of adults) 0.0 24.4 100.0 (2 Economies) Credit bureau coverage (% of adults) 100.0 66.7 100.0 (14 Economies) Figure – Getting Credit in Australia – Score 95.0 Score - Getting Credit Figure – Getting Credit in Australia and comparator economies – Ranking and Score DB 2020 Getting Credit Score 0 100 95.0: Australia (Rank: 4) 85.0: Canada (Rank: 15) 75.0: United Kingdom (Rank: 37) 64.3: Regional Average (OECD high income) 55.0: Japan (Rank: 94) 100: New Zealand (Rank: 1) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Page 31 Doing Business 2020 Australia Figure – Legal Rights in Australia and comparator economies 14 12 12 11 Index Score 10 9 8 7 6.1 6 5 4 2 0 Australia Canada Japan New United OECD Zealand Kingdom high income Page 32 Doing Business 2020 Australia Details – Legal Rights in Australia Strength of legal rights index (0-12) 11 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents Yes 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 requiring a specific description Yes of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of Yes collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the Yes original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; Yes 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 unified geographically and by asset type, with an Yes 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 performed online by any interested third Yes party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes Are secured creditors paid first (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 reorganization procedure? Does the law No protect secured creditors’ rights by providing clear grounds for relief from the stay and 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 allow the secured creditor to sell Yes 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 9 8 8 8 8 8 6.8 7 6 Index Score 6 5 4 3 2 1 0 Australia Canada Japan New United OECD Zealand Kingdom high income Page 33 Doing Business 2020 Australia Details – Credit Information in Australia Depth of credit information index (0-8) Credit bureau Credit registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and Yes No 1 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries Yes No 1 that distribute more 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 Yes No 1 credit registry? Can banks and financial institutions access borrowers’ credit information online Yes No 1 (for example, 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 Yes No 1 banks and financial institutions assess the creditworthiness of borrowers? Total Score ("yes" to either public bureau or private registry) 8 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 22,000,000 0 Number of firms 5,750,000 0 Total 27,750,000 0 Percentage of adult population 100.0 0.0 Page 34 Doing Business 2020 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 May 2019. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Disclosure, review, and To make the data comparable across economies, a case study uses several assumptions about approval requirements for related-party transactions the business and the transaction. • Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for The business (Buyer): prejudicial related-party transactions; Available legal - Is a publicly traded corporation listed on the economy’s most important stock exchange. remedies (damages, disgorgement of profits, disqualification - Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of from managerial position(s) for one year or more, rescission of Buyer where permitted, even if this is not specifically required by law. the transaction) - Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members. • Ease of shareholder suits index (0–10): Access to internal - Has not adopted bylaws or articles of association that go beyond the minimum requirements. corporate documents; Evidence obtainable during trial and allocation of legal expenses Does not follow codes, principles, recommendations or guidelines that are not mandatory. - Is a manufacturing company with its own distribution network. • Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder suits indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to • Extent of shareholder rights index (0-6): Shareholders’ rights Buyer’s five-member board. and role in major corporate decisions - Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores. • Extent of ownership and control index (0-7): Governance - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s safeguards protecting shareholders from undue board control distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of and entrenchment Buyer’s assets and is higher than the market value. • Extent of corporate transparency index (0-7): Corporate - The proposed transaction is part of the company’s principal activity and is not outside the transparency on ownership stakes, compensation, audits and authority of the company. financial prospects - Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0–20): Sum of the - The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and extent of shareholders rights, extent of ownership and control directors that approved the transaction. and extent of corporate transparency indices • Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices Page 35 Doing Business 2020 Australia Protecting Minority Investors - Australia Stock exchange information Stock exchange Australian Securities Exchange Stock exchange URL http://www.asx.com.au Listed firms with equity securities 2013 City Covered Sydney Indicator Australia OECD high income Best Regulatory Performance Extent of disclosure index (0-10) 8.0 6.5 10 (13 Economies) Extent of director liability index (0-10) 2.0 5.3 10 (3 Economies) Ease of shareholder suits index (0-10) 8.0 7.3 10 (Djibouti) Extent of shareholder rights index (0-6) 4.0 4.7 6 (19 Economies) Extent of ownership and control index (0-7) 3.0 4.5 7 (9 Economies) Extent of corporate transparency index (0-7) 7.0 5.7 7 (13 Economies) Figure – Protecting Minority in Australia – Score 64.0 Score - Protecting Minority Investors Figure – Protecting Minority Investors in Australia and comparator economies – Ranking and Score DB 2020 Protecting Minority Investors Score 0 100 86.0: New Zealand (Rank: 3) 84.0: Canada (Rank: 7) 84.0: United Kingdom (Rank: 7) 68.2: Regional Average (OECD high income) 64.0: Australia (Rank: 57) 64.0: Japan (Rank: 57) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Page 36 Doing Business 2020 Australia Figure – Protecting Minority Investors in Australia and comparator economies – Measure of Quality Australia 7 2 8 3 4 8 Canada 6 9 8 6 4 9 Japan 5 6 7 2 4 8 New Zealand 5 9 10 5 5 9 United Kingdom 6 7 10 5 6 8 OECD high income 5.6 5.6 6.6 4.3 4.5 7.4 0 5 10 15 20 25 30 35 40 45 Sub-Indicator Score Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7) Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10) Page 37 Doing Business 2020 Australia Details – Protecting Minority Investors in Australia – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-30) Extent of disclosure index (0-10) 8.0 Whose decision is sufficient 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 conflict of interest to the board of directors? (0-2) Full disclosure of all 2.0 material facts Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on the 1.0 transaction only Must Buyer immediately disclose the transaction to the public? (0-2) Disclosure on the 1.0 transaction only Extent of director liability index (0-10) 2.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Yes 1.0 Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2) Not liable 0.0 Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2) Liable if negligent 1.0 Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1) No 0.0 Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1) No 0.0 Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of fraud 0.0 or bad faith Ease of shareholder suits index (0-10) 8.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? No 0.0 (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1) Yes 1.0 Can the plaintiff 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 plaintiffs recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-20) Extent of shareholder rights index (0-6) 4.0 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 shareholders? Yes 1.0 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 shares? No 0.0 Do shareholders elect and dismiss the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected shares approve? Yes 1.0 Extent of ownership and control index (0-7) 3.0 Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors? No 0.0 Must the board of directors include independent and nonexecutive board members? No 0.0 Page 38 Doing Business 2020 Australia Can shareholders remove members of the board of directors without cause before the end of their term? Yes 1.0 Must the board of directors include a separate audit committee exclusively comprising board members? No 0.0 Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? Yes 1.0 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 Extent of corporate transparency index (0-7) 7.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and directorships in other Yes 1.0 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 meeting agenda? Yes 1.0 Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Page 39 Doing Business 2020 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 the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in 2018 (number Using a case scenario, Doing Business records taxes and mandatory contributions a medium size per year adjusted for electronic and joint filing and payment) company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of • Total number of taxes and contributions paid or withheld, filing and payments, time taken to comply with tax laws, time taken to comply with the including consumption taxes (value added tax, sales tax or requirements of postfiling processes and time waiting. goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces Time required to comply with 3 major taxes (hours per year) ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured • Collecting information, computing tax payable at all levels of government. • Preparing separate tax accounting books, if required • Completing tax return, filing with agencies The VAT refund process: - In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times • Arranging payment or withholding income per capita of the economy. Sales are equally 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 Total tax and contribution rate (% of commercial profits) per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred • Profit or corporate income tax in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output • Social contributions, labor taxes paid by employer VAT in June 2018. • Property and property transfer taxes The corporate income tax audit process: • Dividend, capital gains, financial transactions taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, • Waste collection, vehicle, road and other taxes or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the Postfiling Index tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax • Time to comply with VAT refund (hours) liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. • Time to obtain VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 40 Doing Business 2020 Australia Paying Taxes - Australia Indicator Australia OECD high income Best Regulatory Performance Payments (number per year) 11 10.3 3 (2 Economies) Time (hours per year) 105 158.8 49 (3 Economies) Total tax and contribution rate (% of profit) 47.4 39.9 26.1 (33 Economies) Postfiling index (0-100) 95.3 86.7 None in 2018/19 Figure – Paying Taxes in Australia – Score 86.7 91.3 69.3 95.3 Payments Time Total tax and contribution rate Postfiling index Figure – Paying Taxes in Australia and comparator economies – Ranking and Score DB 2020 Paying Taxes Score 0 100 91.0: New Zealand (Rank: 9) 88.1: Canada (Rank: 19) 86.2: United Kingdom (Rank: 27) 85.7: Australia (Rank: 28) 84.3: Regional Average (OECD high income) 81.6: Japan (Rank: 51) Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution 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 and contribution rate below this threshold receive the same score as the economy at the threshold. Page 41 Doing Business 2020 Australia Figure – Paying Taxes in Australia and comparator economies – Measure of Quality 120 95.3 95.2 96.9 100 86.7 Index score 80 73.2 71.0 60 40 20 0 Australia Canada Japan New United OECD Zealand Kingdom high income Page 42 Doing Business 2020 Australia Details – Paying Taxes in Australia Tax or Payments Notes on Time (hours) Statutory tax Tax base Total tax and Notes on TTCR mandatory (number) Payments rate contribution contribution rate (% of profit) Corporate 1.0 Online 37.0 30% taxable profits 26.08 income tax Superannuation 1.0 Online 18.0 9.5% gross salaries 10.72 guarantee Payroll tax 1.0 Online 5.45% above total payroll 5.10 A$850,000 Worker's 1.0 3.489% gross salaries 4.17 compensation Fringe benefits 1.0 online and jointly 47% Grossedup 1.00 tax taxable value of fringe benefits Municipal tax 1.0 Online fixed fee 0.10 (A$3,725) Tax on insurance 1.0 9% insurance 0.10 contracts premium Land tax 1.0 Online 100 plus 1.6 unimproved land 0.05 cents for each $A value exceeding $692,000 Vehicle tax 1.0 fixed fee ($A980 0.05 for each vehicle) Fuel tax 1.0 liters of fuel 0.00 small amount Value added tax 1.0 Online 50.0 10% value added 0.00 not included (GST) Totals 11 105 47.4 Page 43 Doing Business 2020 Australia Details – Paying Taxes in Australia – Tax by Type Taxes by type Answer Profit tax (% of profit) 26.1 Labor tax and contributions (% of profit) 21.0 Other taxes (% of profit) 0.3 Page 44 Doing Business 2020 Australia Details – Paying Taxes in Australia – Measure of Quality Answer Score Postfiling index (0-100) 95.3 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) 5.0 91.0 Time to obtain VAT refund (weeks) 8.0 90.8 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 correction (hours) 1.8 99.5 Time to complete a corporate income tax correction (weeks) No tax audit per case 100 study scenario Notes: Names of taxes have been standardized. For instance income tax, profit 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 postfiling 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 correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 45 Doing Business 2020 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 tariffs) 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 May 2019. See the methodology for more information. 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 or border handling in Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as origin economy 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, • Obtaining, preparing and submitting documents required by suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and destination economy and any transit economies can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours. • Covers all documents required by law and in practice, including electronic submissions of information Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the Border compliance costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. • Customs clearance and inspections Contributors are private sector experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: • Handling and inspections that take place at the economy’s port - For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in or border the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy. Domestic transport - It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from • Loading or unloading of the shipment at the warehouse or its natural import partner—the economy from which it imports the largest value (price times port/border quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is • Transport between warehouse and port/border the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while shipment is en - The mode of transport is the one most widely used for the chosen export or import product and route 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 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 46 Doing Business 2020 Australia Trading across Borders - Australia Indicator Australia OECD high income Best Regulatory Performance Time to export: Border compliance (hours) 36 12.7 1 (19 Economies) Cost to export: Border compliance (USD) 766 136.8 0 (19 Economies) Time to export: Documentary compliance (hours) 7 2.3 1 (26 Economies) Cost to export: Documentary compliance (USD) 264 33.4 0 (20 Economies) Time to import: Border compliance (hours) 39 8.5 1 (25 Economies) Cost to import: Border compliance (USD) 539 98.1 0 (28 Economies) Time to import: Documentary compliance (hours) 4 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 100 23.5 0 (30 Economies) Figure – Trading across Borders in Australia – Score 78.3 27.7 96.4 34.0 86.4 55.1 98.7 85.7 Time Cost Time Cost Time Cost Time Cost to to to to to to to to export: export: export: export: import: import: import: import: Border Border Documentary Documentary Border Border Documentary Documentary compliance compliance compliance compliance compliance compliance compliance compliance Figure – Trading across Borders in Australia and comparator economies – Ranking and Score DB 2020 Trading Across Borders Score 0 100 94.3: Regional Average (OECD high income) 93.8: United Kingdom (Rank: 33) 88.4: Canada (Rank: 51) 85.9: Japan (Rank: 57) 84.6: New Zealand (Rank: 63) 70.3: Australia (Rank: 106) Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Page 47 Doing Business 2020 Australia Figure – Trading across Borders in Australia – Time and Cost Time (hours) Cost (USD) 45 766 800 39 40 36 700 35 Time (hours) 539 600 Cost (USD) 30 500 25 400 20 264 300 15 10 7 200 4 100 5 100 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 48 Doing Business 2020 Australia 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 (hours) Associated Costs (USD) Export: Clearance and inspections required by 1.0 65.0 customs authorities Export: Clearance and inspections required by 4.5 184.0 agencies other than customs Export: Port or border handling 30.0 517.0 Import: Clearance and inspections required by 1.0 100.0 customs authorities Import: Clearance and inspections required by 2.0 0.0 agencies other than customs Import: Port or border handling 36.0 439.0 Page 49 Doing Business 2020 Australia 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 Page 50 Doing Business 2020 Australia Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the courts The dispute in the case study involves the breach of a sales contract between two domestic (calendar days) businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement. • Time to file and serve the case • Time for trial and to obtain the judgment To make the data on the time and comparable across economies, several assumptions about the case are used: • Time to enforce the judgment - The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both Cost required to enforce a contract through the courts (% of located in the economy’s largest business city. For 11 economies the data are also collected for the claim value) second largest business city. - The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of • Average attorney fees adequate quality. - The value of the dispute is 200% of the income per capita or the equivalent in local currency of • Court costs USD 5,000, whichever is greater. • Enforcement costs - The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater. Quality of judicial processes index (0-18) - The Seller requests the pretrial attachment of the defendant’s movable assets to secure the • Court structure and proceedings (-1-5) claim. - The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods • Case management (0-6) was not adequate. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. - The Seller enforces the judgment through a public sale of the Buyer’s movable assets. • Alternative dispute resolution (0-3) Page 51 Doing Business 2020 Australia Enforcing Contracts - Australia Standardized Case Claim value AUD 138,827 Court name District Court of New South Wales City Covered Sydney Indicator Australia OECD high income Best Regulatory Performance Time (days) 402 589.6 120 (Singapore) Cost (% of claim value) 23.2 21.5 0.1 (Bhutan) Quality of judicial processes index (0-18) 15.5 11.7 None in 2018/19 Figure – Enforcing Contracts in Australia – Score 76.9 74.0 86.1 Time Cost Quality of judicial processes index Figure – Enforcing Contracts in Australia and comparator economies – Ranking and Score DB 2020 Enforcing Contracts Score 0 100 79.0: Australia (Rank: 6) 71.5: New Zealand (Rank: 23) 68.7: United Kingdom (Rank: 34) 67.8: Regional Average (OECD high income) 65.3: Japan (Rank: 50) 57.1: Canada (Rank: 100) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Page 52 Doing Business 2020 Australia Figure – Enforcing Contracts in Australia – Time and Cost Time (days) Cost (% of claim value) 1000 910 45.7 50 Cost (% of claim value) 800 40 Time (days) 589.6 600 27.2 30 23.2 22.3 23.4 437 402 21.5 400 360 20 216 200 10 0 0 Australia Canada Japan New OECD United Zealand high Kingdom income Page 53 Doing Business 2020 Australia Figure – Enforcing Contracts in Australia and comparator economies – Measure of Quality Australia 2.5 5.5 3 4.5 Canada 2 2 3 4 Japan 2.5 1 1 3 New Zealand 2 3 1.5 3 United Kingdom 2 5 3.5 4.5 OECD high income 2.5 3.2 2.4 3.6 0 2 4 6 8 10 12 14 16 18 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) 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 Page 54 Doing Business 2020 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 granted? No 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) time to disposition report; (ii) Yes 1.0 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 competent court? Yes 1.0 5. Are there any electronic case management tools in place within the competent court for use by judges? Yes 1.0 6. Are there any electronic case management tools in place within the competent court for use by lawyers? Yes 1.0 Court automation (0-4) 3.0 1. Can the initial complaint be filed electronically through a dedicated platform within the competent court? Yes 1.0 2. Is it possible to carry out service of process electronically for claims filed before the competent court? No 0.0 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 general public Yes through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made Yes available to the general public through publication in official 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 consolidated chapter or Yes 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 order or public policy— No that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes Page 55 Doing Business 2020 Australia 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 consolidated chapter or Yes section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig 2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or No conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 56 Doing Business 2020 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 was completed in May 2019. 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 used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s estate) - The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater. • Measured as percentage of estate value - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. • Court fees The hotel cannot pay back the loan, but makes enough money to operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to judicial • Lawyers’ fees liquidation and reorganization proceedings and the extent to which best insolvency practices have • Assessors’ and auctioneers’ fees been implemented in each economy covered. • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal 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) Page 57 Doing Business 2020 Australia Resolving Insolvency - Australia Indicator Australia OECD high income Best Regulatory Performance Recovery rate (cents on the dollar) 82.7 70.2 92.9 (Norway) Time (years) 1.0 1.7 0.4 (Ireland) Cost (% of estate) 8.0 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going concern) 1 .. .. Strength of insolvency framework index (0-16) 11.0 11.9 None in 2018/19 Figure – Resolving Insolvency in Australia – Score 89.0 68.8 Recovery rate Strength of insolvency framework index Figure – Resolving Insolvency in Australia and comparator economies – Ranking and Score DB 2020 Resolving Insolvency Score 0 100 90.2: Japan (Rank: 3) 81.0: Canada (Rank: 13) 80.3: United Kingdom (Rank: 14) 78.9: Australia (Rank: 20) 74.9: Regional Average (OECD high income) 69.5: New Zealand (Rank: 36) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Page 58 Doing Business 2020 Australia Figure – Resolving Insolvency in Australia – Time and Cost Time (years) Cost (% of estate) 1.8 1.7 9.3 10 1.6 8.0 Cost (% of estate) 1.4 1.3 8 7.0 Time (years) 1.2 6.0 1.0 1.0 6 1 0.8 4.2 0.8 0.6 3.5 4 0.6 0.4 2 0.2 0 0 Australia Canada Japan New OECD United Zealand high Kingdom income Page 59 Doing Business 2020 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 1 3 New Zealand 3 3 2 0.5 United Kingdom 5 3 2 1 OECD high income 5.3 2.8 2.1 1.9 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) 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.” Figure – Resolving Insolvency in Australia and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 100 92.1 90 86.7 85.4 82.7 79.7 80 70.2 70 60 50 40 30 20 10 0 Australia Canada Japan New Zealand United Kingdom OECD high income Page 60 Doing Business 2020 Australia Details – Resolving Insolvency in Australia Indicator Answer Score 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 estate) 8.0 The cost of the procedure will amount to approximately 8% of the value of the hotel. Major 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 82.7 (cents on the dollar) Page 61 Doing Business 2020 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 proceedings? (a) Debtor may file for 1.0 both liquidation and reorganization Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a creditor 0.5 may file for liquidation only What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) (a) Debtor is 1.0 Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value generally unable to of its assets 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 goods and services to the No 0.0 debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0 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 after commencement of Yes 1.0 insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over ordinary 1.0 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 receive at least as much as No 0.0 what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote No 0.0 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 appointment of the insolvency Yes 1.0 representative? Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? No 0.0 Does the insolvency framework provide that a creditor has the right to request information from the insolvency Yes 1.0 representative? Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting Yes 1.0 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.” Page 62 Doing Business 2020 Australia Employing Workers Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the worker and the (i) whether fixed-term contracts are prohibited for permanent business are used. tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the maximum probationary period; (iv) minimum The worker: wage;(v) ratio of minimum wage to the average value added per - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. worker. - Is a full-time employee. - Is not a member of the labor union, unless membership is mandatory. Working hours (i) maximum number of working days allowed per week; (ii) The business: premiums for work: at night, on a weekly rest day and overtime; - Is a limited liability company (or the equivalent in the economy). (iii) whether there are restrictions on work at night, work on a - Operates a supermarket or grocery store in the economy’s largest business city. For 11 weekly rest day and for overtime work; (iv) length of paid annual economies the data are also collected for the second largest business city. leave. - Has 60 employees. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the Redundancy rules food retail sector and they apply even to firms that are not party to them. (i) whether redundancy can be basis for terminating workers; (ii) - Abides by every law and regulation but does not grant workers more benefits than those whether employer needs to notify and/or get approval from third mandated by law, regulation or (if applicable) collective bargaining agreements. party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to 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, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected. Page 63 Doing Business 2020 Australia Employing Workers - Australia Details – Employing Workers in Australia Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single fixed-term contract (months) No limit Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 2034.0 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 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 notification if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? No Third-party approval if nine workers are dismissed? 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 (weeks of salary) 2.0 Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 4.0 Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 4.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 3.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 10.0 Page 64 Doing Business 2020 Australia Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 12.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 8.7 Unemployment protection after one year of employment? Yes Page 65 Doing Business 2020 Australia Business Reforms in Australia From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2020 Getting Credit: Australia improved access to credit information by beginning to distribute both positive and negative data. 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 unified collateral registry. DB2012 Resolving Insolvency: Australia clarified the priority of claims of unsecured creditors over all shareholders’ claims and introduced further regulation of the profession of insolvency practitioners. DB2011 Employing Workers: 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 66 Doing Business 2020 Australia Page 67