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Australia A Global Financial Services Centre Benchmark Report 2010

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Page 1: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

AustraliaA Global Financial Services Centre

Benchmark Report 2010

Page 2: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia has emerged from the Global Financial Crisis with its standing as a financial centre in the region enhanced.

Australia weathered the worst of the global financial crisis. Australia’s financial sector remains in robust good health, underpinned by a world best practice regulatory system. The World Economic Forum’s Financial Development Report 2009 has also ranked Australia second out of 55 of the world’s leading financial systems and capital markets.

Australia is home to the world’s fourth largest pool of contestable funds under management, which is also the largest in the region. The funds management sector has grown five-fold since 1995, at a compound annual growth rate of 12 per cent, and now has A$ 1.7 trillion in funds under management.

Australia’s impressive record of sustained economic and employment growth is expected to continue. The IMF forecasts Australian economic growth of 3.0 per cent in 2010 and 3.5 per cent for 2011. This compares favourably with those of other advanced economies. Australia’s unemployment rate is also relatively low at 5.3 per cent. The 2010 IMD World Competitiveness Yearbook has rated Australia’s economy as the second most resilient in the world.

These core economic strengths, our robust institutional framework, the openness of our economy and the size, depth and sophistication of our markets will underpin the future growth of the financial services sector.

The Australian Government has continued to take important steps to support the internationalisation of the financial sector and to enhance Australia’s attractiveness as a global financial services centre.

AUSTRALIA

A Global Financial Services Centre

ABN 11 764 698 227

Date: September 2010

ISBN: 978-0-9807059-3-5

DISCLAIMERThis report has been prepared as a general overview. It is not intended to provide an exhaustive coverage of the topic. The information is made available on the understanding that the Australian Trade Commission (Austrade) is not providing professional advice. Therefore, while all care has been taken in the preparation of this report, Austrade does not accept responsibility for any losses suffered by persons relying on the information contained in this report or arising from any error or omission in the report. Any person relying on this information does so entirely at their own discretion and Austrade strongly recommends the reader obtain independent professional advice prior to acting on this information.

Austrade’s role includes to facilitate engagement by Australian financial services exporters in markets outside Australia. Austrade is not a promoter of any financial services products or investments and does not provide investment advice. Austrade assumes no responsibility for any company, product or service mentioned in this document, for any materials provided in relation to such products, nor for any act or omission of any business connected with such products. Investors should always consider whether an investment is appropriate for their needs and seek out independent advice as appropriate.

Page 3: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

StrongEconomy

Australia’s performance through the Global Financial Crisis confirms its standing as one of the world’s most resilient economies.

SECTION 1

Strong EconomyWorld’s 20 Largest Economies 2

Real GDP Growth by Country 3

Resilience of the Economy to Economic Cycles 4

Unemployment Rates by Country 5

Australia’s Real Gross Value Added by Industry 6

Australia’s Real Gross Value Added – Growth by Industry 7

Gross Fixed Capital Formation as a Percentage of GDP 8

Inward Foreign Direct Investment Stocks by Country 9

Australia’s Exports of Goods and Services 10

Australia’s Exports of Education Services 11

The Prosperity Index – World Ranking by Country 12

Net Government Debt 13

Percentage of Nonperforming Bank Loans to Total Bank Loans 14

Page 4: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

World’s 20 Largest Economies – 2010F

Percentage share of total world nominal GDP in US$

GDP of the world’s 183 economies: US$61,767 billion

GDP of Asia Pacific Economic Cooperation’s 21 member economies: US$34,483 billion (55.83%)

F = Forecast

Sources: International Monetary Fund, World Economic Outlook Database, April 2010; Austrade

1. USA 23.96%

2. China 8.69%

3. Japan 8.54%

4. Germany 5.40%

5. France 4.32%

6. UK 3.60%

7 . Italy 3.43%

8. Brazil 3.09% 9. Canada 2.52% 10. Russia 2.44% 11. Spain 2.31%

12. India 2.21%

13. Australia 1.93%

14. Mexico 1.61%15. South Korea 1.60%16. Netherlands 1.29%17. Turkey 1.15%18. Indonesia 1.09%19. Switzerland 0.87%20. Belgium 0.78%

Rest of World 19.17%

8.39%

Although Australia’s population is less than half a per cent of the global total, its economy ranks the 13th largest in the world, rivalling countries such as India, South Korea and Netherlands. Australia’s GDP is now estimated at around US$1.2 trillion, the fourth largest economy in the Asia-Pacific region.

Section 1. Strong Economy 2

Page 5: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Real GDP Growth by Country – 2002 to 2010F

F = Forecast; UAE = United Arab Emirates

1. Based on market exchange rates

Sources: International Monetary Fund, World Economic Outlook (WEO) Database, April 2009; WEO Update July 2009; Austrade

Average Growth RateCountry 1998 to 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010F

China 9.7 9.1 10.0 10.1 10.4 11.6 13.0 9.6 9.1 10.5India 7.0 4.6 6.9 7.9 9.2 9.8 9.4 6.4 5.7 9.4Vietnam 6.9 7.1 7.3 7.8 8.4 8.2 8.5 6.2 5.3 6.5UAE 5.4 2.6 11.9 9.7 8.2 8.7 6.1 5.1 -0.7 1.3Singapore 5.0 4.2 3.8 9.2 7.6 8.7 8.2 1.4 -1.3 9.9Korea 4.2 7.2 2.8 4.6 4.0 5.2 5.1 2.3 0.2 5.7Philippines 4.2 4.4 4.9 6.4 5.0 5.3 7.1 3.8 1.1 6.0Malaysia 4.1 5.4 5.8 6.8 5.3 5.8 6.2 4.6 -1.7 6.7Taiwan 4.0 5.3 3.7 6.2 4.7 5.4 6.0 0.7 -1.9 7.7Indonesia 3.5 4.5 4.8 5.0 5.7 5.5 6.3 6.0 4.5 6.0Hong Kong 3.4 1.8 3.0 8.5 7.1 7.0 6.4 2.1 -2.8 6.0Australia 3.3 3.9 3.2 3.6 3.2 2.6 4.7 2.4 1.3 3.0Thailand 3.2 5.3 7.1 6.3 4.6 5.1 4.9 2.5 -2.2 7.0Brazil 3.1 2.7 1.1 5.7 3.2 4.0 6.1 5.1 -0.2 7.1Greece 3.0 3.4 5.9 4.6 2.2 4.5 4.5 2.0 -2.0 -2.0Spain 2.7 2.7 3.1 3.3 3.6 4.0 3.6 0.9 -3.6 -0.4Canada 2.7 2.9 1.9 3.1 3.0 2.9 2.5 0.5 -2.5 3.6New Zealand 2.5 4.9 4.2 4.4 3.2 1.0 2.8 -0.1 -1.6 3.0USA 2.4 1.8 2.5 3.6 3.1 2.7 2.1 0.4 -2.4 3.3UK 2.0 2.1 2.8 3.0 2.2 2.9 2.6 0.5 -4.9 1.2Netherlands 2.0 0.1 0.3 2.2 2.0 3.4 3.6 2.0 -4.0 1.3Switzerland 1.8 0.4 -0.2 2.5 2.6 3.6 3.6 1.8 -1.5 1.5France 1.7 1.1 1.1 2.3 1.9 2.4 2.3 0.1 -2.5 1.4Germany 1.0 0.0 -0.2 1.2 0.7 3.2 2.5 1.2 -4.9 1.4Italy 0.7 0.5 0.0 1.5 0.7 2.0 1.5 -1.3 -5.0 0.9Japan 0.6 0.3 1.4 2.7 1.9 2.0 2.4 -1.2 -5.2 2.4World Average1 2.6 2.0 2.7 4.0 3.4 3.9 3.9 1.8 -2.0 3.6

In the July 2010 Update of the International Monetary Fund’s (IMF) World Economic Outlook, the IMF has forecast that the Australian economy will grow by 3.0 per cent in 2010 and 3.5 per cent in 2011, giving it a brighter outlook than that of the advanced economies as a whole. A timely response to the financial crisis, a healthy banking sector, rigorous regulatory environment, flexible exchange rate and sustained demand from China for Australian commodities helped to avoid the worst of the financial turbulence that other economies experienced.

Section 1. Strong Economy 3

Page 6: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Resilience of the Economy to Economic Cycles – 2006 to 2010The higher the score the better1

Surveyed question: Resilience of the economy to economic cycles is strong. 1. IMD World Competitiveness Yearbook Executive Opinion Survey based on an index from 0 to 10. The IMD included 58 economies in the 2010 survey.

Sources: IMD World Competitiveness Online 1995-2010 (Updated: May 2010); Austrade

Rank

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Country 2006 Score

Australia 7.39

USA 7.22

Denmark 7.16

Hong Kong 7.09

India 6.84

Israel 6.80

Ireland 6.68

Norway 6.68

Chile 6.41

Canada 6.38

Switzerland 6.34

Malaysia 6.34

Japan 6.32

Qatar 6.31

Singapore 6.30

Estonia 6.19

Finland 6.02

Iceland 6.00

China 5.90

Thailand 5.82

UK 5.82

South Africa 5.75

Sweden 5.72

Jordan 5.67

Taiwan 5.65

Country 2007 Score

Denmark 7.45

USA 6.90

Israel 6.82

Austria 6.67

Malaysia 6.64

Switzerland 6.43

Australia 6.38

India 6.33

Hong Kong 6.33

Singapore 6.19

China 6.17

Norway 6.08

UK 6.02

Chile 6.00

Taiwan 5.79

Japan 5.79

Ireland 5.76

Luxembourg 5.73

Estonia 5.72

Netherlands 5.66

Slovenia 5.66

Sweden 5.61

Czech Republic 5.60

Jordan 5.50

Iceland 5.44

Country 2008 Score

Australia 6.78

Denmark 6.73

Switzerland 6.43

Israel 6.14

Austria 6.00

Norway 5.96

Chile 5.89

India 5.87

Brazil 5.83

Finland 5.80

Singapore 5.78

Sweden 5.66

Netherlands 5.66

Malaysia 5.66

Hong Kong 5.61

Taiwan 5.52

Czech Republic 5.41

Canada 5.36

Germany 5.34

Slovenia 5.29

USA 5.29

Estonia 5.27

Jordan 5.15

China 5.15

Ireland 5.02

Country 2009 Score

Qatar 6.16

Norway 5.96

Australia 5.83

Chile 5.83

Denmark 5.79

India 5.78

Brazil 5.54

Israel 5.53

Switzerland 5.38

China 5.05

Malaysia 5.04

Finland 5.00

Austria 4.98

Singapore 4.96

Hong Kong 4.94

Taiwan 4.91

South Africa 4.84

Netherlands 4.83

Germany 4.79

Sweden 4.77

Philippines 4.73

Slovenia 4.63

Lithuania 4.60

Jordan 4.60

New Zealand 4.49

Country 2010 Score

Israel 7.13

Australia 7.04

India 6.82

Qatar 6.82

Malaysia 6.63

Chile 6.29

Switzerland 6.27

Norway 6.11

Taiwan 6.07

China 6.02

Poland 5.80

Singapore 5.78

Sweden 5.75

Indonesia 5.64

South Korea 5.55

Canada 5.55

Brazil 5.51

Philippines 5.50

Austria 5.46

Hong Kong 5.40

Thailand 5.33

Denmark 5.22

Netherlands 5.20

Germany 5.14

Turkey 4.87

The Australian economy has recorded 19 years of uninterrupted growth to 2010, despite two global downturns. The strength of the Australian economy is well recognised. The 2010 Institute for Management Development (IMD) World Competitiveness Yearbook rated Australia’s economy the second most resilient in the world. For countries with populations greater than 20 million, Australia ranked first in 2009 and 2010, and has topped this category in eight of the previous nine years.

Section 1. Strong Economy 4

Page 7: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Unemployment Rates by Country – 2007 to 2010

1. Latest unemployment rate for each country – annual rates not yet available.

Sources: 2007 to 2009 data extracted on 18 August 2010 from OECD.Stat, and 2010 latest figures sourced from Bloomberg; Austrade

Annual Latest Rate1

Country 2007 2008 2009 2010

Spain 8.3 11.3 18.0 20.1

Ireland 4.6 6.1 11.8 13.7

Turkey 10.3 11.0 14.1 12.0

Greece 8.3 7.7 9.5 11.7

Portugal 8.0 7.6 9.5 10.6

France 8.0 7.4 9.1 9.5

Sweden 6.0 6.2 8.3 9.5

USA 4.6 5.8 9.3 9.5

Belgium 7.5 7.0 7.9 8.6

Chile 7.1 7.8 10.8 8.5

Italy 5.9 6.7 7.8 8.4

Canada 6.0 6.1 8.3 8.0

UK 5.4 5.7 7.6 7.8

Germany 8.7 7.5 7.7 7.6

Brazil 9.3 7.9 8.1 7.0

Russia 6.1 6.4 8.4 6.8

New Zealand 3.7 4.2 6.1 6.8

Netherlands 4.5 3.9 4.9 5.5

Australia 4.4 4.2 5.6 5.3

Japan 3.9 4.0 5.1 5.3

China 4.0 4.2 4.3 4.2

South Korea 3.3 3.2 3.7 3.7

Switzerland 3.5 3.4 4.2 3.6

Norway 2.5 2.6 3.2 3.0

Unemployment Rate – Percentage of Labour Force

Australia’s unemployment rate has eased to just over 5 per cent after peaking at 5.8 per cent in the middle of 2009. Australia’s latest unemployment rate is almost half that of the Euro area and the United States. Australia is also ranked second globally in terms of economic resilience which in part reflects the openness of the economy and sustained economic reforms over recent decades. Over the past year, employment in Australia rose by a strong 300,000.

Section 1. Strong Economy 5

Page 8: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Finance/Insurance 10.8%Generated $A121 billion

Healthcare/Social Assistance 6.3%

Professional/Scientific/Technical Services 6.5%

Public Administration/Safety 5.5%

Transport/Postal/Warehousing 5.4%

Wholesale Trade 4.9%

Retail Trade 4.9%

Education/Training 4.4%

Service Industries 80.8%

Other Services2 15.7%

Information Media/Telecommunications 3.0%

Rental/Hiring/Real Estate Services 3.3%

Utilities 2.6%

Mining 7.3%

Construction 7.5%

Manufacturing 9.1%

Agriculture/Forestry/Fishing 2.8%

Australia’s Real Gross Value Added by Industry – 20101

1. Annual total to March 2010.

2. Including Accommodation/Food Services, Administrative/Support Services, and Arts/Recreation Services.

Sources: Australian Bureau of Statistics, cat. no. 5206.0, National Income, Expenditure and Product, Time Series Workbook (released 2 June 2010), Table 6; Austrade

The financial sector is the largest contributor to Australia’s national output, directly generating 10.8 per cent or A$121 billion of real gross value added in 2010. This contribution is up from 8.9 per cent or A$53 billion two decades ago. Australia’s financial sector continues to grow more rapidly than most other sectors of the economy, benefiting from significant structural reforms and strong and resilient economic growth over the past two decades. The financial services industry is a major driver of Australia’s economic growth, contributing almost four times that of agriculture, forestry and fishing (A$32 billion), and nearly 50 per cent more than mining (A$82 billion). The increasing significance of finance and insurance over the past two decades has also aided growth in related sectors such as information, media and telecommunications, and other business services.

Section 1. Strong Economy 6

Page 9: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

0 1 2 3 4 5 6 7

5.3

5.2

4.7

5.1

4.4

4.1

4.1

3.8

3.6

3.1

3.5

2.6

2.7

2.6

2.2

0.9

1.9

All Industry Average Growth: 3.3% Per Annum

Average Annual % Change

Construction

Administrative/Support Services

Professional/Scientific/Technical Services

Financial/Insurance Services

Retail Trade

Healthcare/Social Assistance

Arts/Recreation Services

Information Media/Telecommunications

Agriculture/Forestry/Fishing

Mining

Wholesale Trade

Rental/Hiring/Real Estate Services

Transport/Postal/Warehousing

Accommodation/Food Services

Public Administration/Safety

Education/Training

Utilities

Manufacturing

1.9

Australia’s Real Gross Value Added – Growth by Industry – 1999 to 20101

1. Annual total to March each year.

Sources: Australian Bureau of Statistics, cat. no. 5206.0, National Income, Expenditure and Product, Time Series Workbook, Table 6 (released 2 June 2010); Austrade

Australia’s finance and insurance sector has been one of the country’s highest performing industries, achieving an average annual growth rate of 4.7 per cent a year between 1999 and 2010. This is well above the combined average for all industries (3.3 per cent) and reflects the strength of Australia’s service-based economy.

Section 1. Strong Economy 7

Page 10: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Gross Fixed Capital Formation as a Percentage of GDP – 2008

Sources: OECD Factbook 2010: Economic, Environmental and Social Statistics (released 26 May 2010); Austrade

0

5

10

15

20

25

30

Australia

Sou

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Mex

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Turk

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29.4

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8

24.9

24.2

23.

9

23.

1

22.

7

22.

6

22.

2

22.

1

22.

1

21.9

21.8

21.7

21.7

21.3

21.1

20 .

9

20.

9

20.

9

20.

8

20.

6

20 .

6

20.

4

19.9

19.5

19.4

19.3

19.0

17.9

16.8

The share of total GDP devoted to investment in fixed assets is an important determinant of future economic growth. Higher capital investment tends to increase productivity and contribute to higher GDP growth. Australia’s fixed capital investment as a percentage of GDP was 29.4 per cent in 2008, the highest of all OECD countries. This rate is also well above the average of EU27 (21.1 per cent) and OECD (20.6 per cent).

Section 1. Strong Economy 8

Page 11: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Inward Foreign Direct Investment Stocks by Country

Sources: United Nations Conference in Trade and Development Database (www.unctad.org/fdistatistics), Annex Tables 7 and 3; Austrade

1990 1995 2000 2005 2006 2007 2008 2009 2009Country (US$ Billion)

Switzerland 14.4 18.1 34.7 45.7 67.8 88.3 87.8 94.2 464

Netherlands 23.1 27.7 63.3 70.7 76.1 93.6 73.2 75.3 597

UK 20.6 17.6 30.4 36.9 46.7 44.4 36.8 51.7 1,125

Spain 12.7 17.5 26.9 34.0 37.4 40.6 39.1 45.9 671

France 7.9 12.2 29.4 41.5 48.8 48.6 32.3 42.8 1,133

Canada 19.4 20.9 29.3 30.1 29.3 36.3 29.5 39.3 525

Malaysia 23.4 32.3 56.2 32.2 34.3 41.2 33.1 39.0 75

Thailand 9.7 10.5 24.4 34.2 37.2 38.1 34.2 37.5 99

Australia 23.2 28.0 29.8 32.8 37.8 40.5 29.5 33.5 328

Brazil 8.5 6.2 19.0 20.6 20.3 22.7 17.6 25.5 401

USA 9.3 13.7 28.5 22.8 25.1 26.1 17.9 21.9 3,121

Germany 6.5 6.6 14.3 17.1 20.3 20.9 18.2 21.0 702

Russia – 1.4 12.4 23.6 27.0 38.2 12.7 20.3 252

Italy 5.3 5.8 11.0 12.6 15.8 17.2 14.8 18.6 394

Philippines 10.2 13.7 24.2 15.2 14.4 14.2 12.9 14.6 24

Greece 6.2 8.5 11.2 12.0 15.6 17.2 10.9 13.6 45

Indonesia 6.9 9.3 15.2 14.4 15.0 18.5 13.3 13.5 73

South Korea 2.0 1.8 7.1 12.4 12.5 11.4 10.2 13.3 111

India 0.5 1.5 3.5 5.1 7.5 8.8 9.6 12.9 164

Taiwan 5.9 5.7 6.0 11.8 13.3 12.4 11.3 12.7 48

China 5.1 13.4 16.2 12.2 11.0 9.7 8.7 10.1 473

Japan 0.3 0.6 1.1 2.2 2.5 3.0 4.2 3.9 200

World 9.8 11.4 23.3 25.4 29.1 32.5 25.4 30.7 17,743

Developed Economies 9.0 10.8 23.0 25.5 29.9 33.3 26.3 31.5 12,353

Developing Economies 13.6 14.6 25.0 25.2 26.9 30.0 24.4 29.1 4,893

Australia’s Foreign Direct Investment (FDI) stocks rose almost 350 per cent to US$328 billion between 1990 and 2009. This represents a compound annual growth rate of 8.2 per cent since 1990. As a percentage of GDP, FDI in Australia rose from 23.2 per cent in 1990 to 33.5 per cent in 2009.

Section 1. Strong Economy 9

Inward FDI Stock as a Percentage of GDP (%)

Page 12: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia’s Exports of Goods and Services (US$ Billion)1

Financial year ending 30 June

0

40

80

120

160

200

240Commercial Services

Compound Annual Growth Rate since 1990: 7.8%

Merchandise Goods

US

$ B

illio

n

199

0

1991

1992

1993

1994

1995

1996

1997

199

8

1999

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

201

0

9

39 40

11 11

41 41

11

47 48

60 6054 57 59 61

6877 75

98

114

144

176

188

14 15

19 1916

19 18 1820

24

4349

39

31

30

26

172

45

1. Australia’s exports in A$ were converted to US$ values, using US$/A$ exchange rate at the end of June each year from the Reserve Bank of Australia Statistics.

Sources: Australian Bureau of Statistics, cat. no. 5368.0, International Trade in Goods and Services, Australia, Table 1 (released 4 August 2010); Austrade

Australia’s annual export value of goods and services in US dollar terms fell 5.9 per cent to US$217 billion in 2009-10. Nevertheless, Australia has experienced strong export growth for 16 of the last 20 years, and export value has increased by a compound annual growth rate of around 8 per cent. The overall growth in the country’s external sector can be attributed to ongoing economic reform, Australia’s strong competitiveness, continued trade openness, and diversified export markets.

Section 1. Strong Economy 10

Page 13: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia’s Exports of Education Services

1. Includes international students on student visas only. 2. Export income does not include income generated by the operations of offshore campuses of Australian institutions.

Sources: Australian Education International, Research Snapshot, June 2009; Austrade

Share of 2009 Change 2007 2008 2009 Total 2008 to 09

Education Related Travel Services1 12,177 15,002 17,986 96.8 19.9 1. China 2,738 3,432 4,102 22.1 19.5

2. India 1,618 2,413 3,187 17.2 32.1

3. South Korea 964 1,082 1,117 6.0 3.2

4. Malaysia 670 756 856 4.6 13.2

5. Thailand 498 605 719 3.9 18.8

6. Vietnam 286 467 713 3.8 52.7

7. Nepal 173 380 614 3.3 61.6

8. Indonesia 487 525 576 3.1 9.7

9. Hong Kong 571 558 560 3.0 0.4

10. Brazil 268 365 425 2.3 16.4

Other countries 3,904 4,419 5,117 27.5 15.8

Other Educational Services2 383 495 556 3.0 12.3

Education Consultancy Services 132 124 115 0.6 -7.3

Correspondence Courses 22 25 24 0.1 -4.0

Services through Educational Institutions 104 203 250 1.3 23.2

Other Education Services 125 143 167 0.9 16.8

Royalties on Education Services 7 18 33 0.2 83.3

Total Education Related Services Exports 12,189 15,115 18,575 100.0 22.9

(A$ Million) %

International education activity contributed A$18.6 billion in export income to the Australian economy in 2009, up 22.9 per cent from 2008. Education services remain Australia’s fourth largest export, behind coal (A$39.4 billion), iron ore and concentrates (A$30.0 billion), and tourism (A$23.5 billion in 2008-09). Of the total export income generated by education services, A$18 billion was from spending on fees and goods and services onshore by foreign students, with a further A$556 million from education consultancy and other services.

Section 1. Strong Economy 11

Page 14: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

The Prosperity Index1 – World Ranking by Country – 2009

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

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Ger

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Fran

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Hon

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Spa

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Sin

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23)

Taiw

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Mal

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7)

Phili

ppin

es (

55)

Indo

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a (6

1)

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na (7

5)

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(77)

0.922

0.920

0.91

9

0.91

7

0.9

08

0.89

5

0.8

93

0.8

92

0.8

85

0.8

80

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0.828

0.8

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0.79

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0.76

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0.72

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0.72

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0.697

0.581

0.569

0.547

0.546

0.537

0.501

0.47

3

0.42

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0.42

0

Australia has been ranked sixth in the world and first in the Asia-Pacific region in the Legatum Institute’s 2009 Prosperity Index of more than 100 countries. Countries were rated on the following: democratic institutions, economic fundamentals, education, entrepreneurship and innovation, governance, health, personal freedom, safety and security, and social capital. Australia achieved the following top ten rankings: personal freedom (4th), social capital (4th), democratic institutions (5th), education (6th), economic fundamentals (7th), and governance (10th).

Section 1. Strong Economy 12

1. The Prosperity Index ranks 104 nations according to nine building blocks of prosperity. A country’s position in the overall Prosperity Index is produced by equally weighting and averaging its nine sub-index scores. The scores are then ranked to produce the overall ranking. The Index measures prosperity across nine areas that have an established empirical relationship with either national wealth or wellbeing: economic fundamentals, entrepreneurship and innovation, democratic institutions, education, health, safety and security, governance, personal freedom, and social capital.

Sources: The 2009 Legatum Prosperity Index Report; Austrade

Page 15: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia’s net debt is estimated to be around 5 per cent of GDP, according to the IMF 2010 World Economic and Financial Surveys. The ratio is well below the average of 69.9 per cent of GDP for advanced economies. The relatively low level of public sector debt reinforces Australia’s strong financial position and sound economic credentials.

Net Government Debt (% of GDP) – 2010

1. Does not reflect the latest federal government budget released 11 May 2010.

2. Does not reflect additional deficit reduction plans announced 10 May 2010.

Sources: IMF World Economic and Financial Surveys, Fiscal Monitor 14 May 2010, Table 3; Austrade

0

20

40

60

80

100

120

140

% o

f G

DP

Sw

itzer

land

Den

mar

k

New

Zea

land

Australia1

Can

ada

Net

herla

nds

Irela

nd UK

Ger

man

y

Fran

ce

Icel

and

Spa

i n2

Aus

tria

Italy

Bel

gium

Port

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2

US

A

Japa

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3.1

3.3 5.4

32.

2

39 .

2

46.0

47.8

57.5 60 .

5 66.

2

68.

6

71.6 74

.5 77.2 8

2.2

91. 1

116.

0 121.

6

Section 1. Strong Economy 13

Page 16: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Percentage of Nonperforming Bank Loans to Total Bank Loans – 2004 to 2009

Note: Due to differences in national accounting, taxation, and supervisory regimes, the data is not strictly comparable across countries.

1. The data excludes interbank loans. 2. Break in 2005; data started to cover all commercial banks. Previous years data covered “major commercial banks” (comprising state-owned commercial banks and joint stock commercial banks). 3. Data for national banks only. 4. Exposure to borrowers in a state of insolvency (even when not recog-nized in the court of law) plus exposure to borrowers in a temporary situation of difficulty. 5. Commercial banks. 6. Unless otherwise indicated, data refers to the end of the fiscal year, i.e., March of the indicated calendar year. 7. Gross doubtful debts. Break in series in 2006. 8. Covers all licensed banks (49 as of Q3 2009). 9. All FDIC-insured institutions. 10. Doubtful exposures to other resident sectors over total lending to other resident sectors. 11. Unless otherwise indicated, data refers to the end of the fiscal year, i.e., March of the next calendar year; for major banks. 12. For 2005-06 the figures are for the sample of institutions that are already complying with IFRS, accounting as of December 2004 for about 87 per cent of the usual aggregate considered. From 2007 onward, the sample of banking institutions under analysis was expanded to include the institutions that adopted IFRS in 2006; On a consolidated basis. Nonperforming loans are defined as credit to customers overdue. Data for 2008 is preliminary. 13. Loans classified as substandard, doubtful, and loss. 14. Impaired assets to total assets. Figures exclude loans in arrears that are covered by collateral.

Sources: International Monetary Fund, Global Financial Stability Report, April 2010, Statistical Appendix, Table 24; Austrade.

2004 2005 2006 2007 2008 2009 Latest Average

Thailand 11.9 9.1 8.4 7.9 5.7 NA Dec 8.6Philippines1 14.4 10.0 7.5 5.8 4.5 4.6 Sep 7.8Malaysia 11.7 9.6 8.5 6.5 4.8 3.8 Nov 7.5China2 13.2 8.6 7.1 6.2 2.4 1.6 Dec 6.5UAE3 12.5 8.3 6.3 2.9 2.5 4.6 Nov 6.2Greece 7.0 6.3 5.4 4.5 5.0 7.2 Sep 5.9Italy4 6.6 5.3 4.9 4.6 4.9 6.2 Jun 5.4Indonesia5 4.5 7.6 6.1 4.1 3.2 3.8 Sep 4.9India6 7.2 5.2 3.3 2.5 2.4 2.4 Mar 3.8Germany 4.9 4.0 3.4 2.6 2.8 NA Dec 3.5Brazil 2.9 3.5 3.5 3.0 3.1 4.5 Oct 3.4France7 4.2 3.5 3.0 2.7 2.8 NA Dec 3.2Singapore 5.0 3.8 2.8 1.5 1.7 2.3 Sep 2.9Ireland8 0.8 0.7 0.7 0.8 2.6 7.5 Sep 2.2USA9 0.8 0.7 0.8 1.4 2.9 5.4 Dec 2.0Spain10 0.8 0.8 0.7 0.9 3.4 5.1 Dec 2.0Japan11 2.9 1.8 1.5 1.4 1.6 1.8 Sep 1.8Portugal12 2.0 1.5 1.3 1.5 1.9 2.8 Jun 1.8UK 1.9 1.0 0.9 0.9 1.6 3.3 Jun 1.6Hong Kong13 2.3 1.4 1.1 0.8 1.2 1.5 Sep 1.4South Korea13 1.9 1.2 0.8 0.7 1.1 1.5 Sep 1.2Netherlands 1.5 1.2 0.8 NA NA NA Dec 1.2Canada 0.7 0.5 0.4 0.7 1.1 1.2 Sep 0.8Switzerland 0.9 0.5 0.3 0.3 0.5 NA Dec 0.5Australia14 0.2 0.2 0.2 0.2 0.8 1.1 Sep 0.5

Australian banks have one of the lowest non-performing loans ratios of all 97 surveyed economies. Only 1.1 per cent of Australian bank loans are ‘non-performing’. This ratio reflects Australia’s strong financial system, sound regulatory framework and the resilience of the economy.

Section 1. Strong Economy 14

Page 17: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

LiquidMarkets

Australia’s financial markets are amongst the largest, fastest growing and most sophisticated in Asia.

Financial Development Index 2009 Global Ranking by Country 16

World’s 100 Largest Banks’ Credit Rating 17

Australia’s Financial Services Industry: Global Footprint 18

Assets of Australia’s Financial Institutions 19

Global Significance of Australia’s Investment Fund Assets Pool 20

Australia’s Managed Funds Assets 21

Australian Investment Managers Asset Allocation 22

Global Pension Assets 23

World’s 25 Largest Sovereign Wealth Funds by 24 Assets Under Management

Size of Key Stock Markets in the Asia-Pacific Region 25

International and Domestic Debt Securities 26

Real Estate Investment Trust Market Capitalisation 27

Asia-Pacific Hedge Fund Assets Under Management 28

Australian Residential Mortgage-Backed Security Issuance 29

World Insurance Markets 30

High Net Worth Individuals by Country 31

Worldwide Announced Mergers and Acquisitions by Target Nation 32

SECTION 2

Liquid Markets

Page 18: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Financial Development Index 2009 Global Ranking by Country

Sources: World Economic Forum, The Financial Development Report 2009 (released 8 October 2009); Austrade

The World Economic Forum’s The Financial Development Report 2009 has ranked Australia second of 55 of the world’s leading financial systems and capital markets, ahead of the United States, Singapore and Hong Kong. Australia leads the Asia-Pacific region as a result of its solid performance in both banking (5th in the world) and non-banking financial services (3rd in the world). The report stressed that the efficiency of Australia’s banks (a key component of banking financial services) is a key strength.

Section 2. Liquid Markets 16

UK Australia USA Singapore Hong Kong Japan China India

Overall Index (out of 55) 1 2 3 4 5 9 26 38

Financial Access 16 1 12 9 13 37 30 48

Non-Banking Financial Services 1 3 2 11 9 6 12 17

Banking Financial Services 2 5 20 11 1 3 10 39

Financial Markets 2 6 1 3 9 5 26 22

Financial Stability 37 9 38 5 3 34 23 46

Business Environment 12 11 10 2 9 15 40 48

Institutional Environment 15 14 11 1 10 17 35 48

Page 19: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

World’s 100 Largest Banks’ Credit Rating

Sources: The chart was sourced from the Reserve Bank of Australia Financial Stability Report March 2009, page 25, Graph 38, and updated with the 2009 data of banks assets from The Banker 1000 World Banks 2010 and Standard and Poor’s Credit Ratings (downloaded 27 July 2010) from Bloomberg; Austrade

0

500

1,000

1,500

2,000

2,500

3,000

Australia’s four major banks

Ass

ets

US

$ B

illio

n (

as

of

31 D

ecem

ber

20

09)

AAA AA AA- A+ A A- BBB+ BBB BBB- NR

Among the world’s 100 largest banks by assets, nine banks are rated AA or above – and four of these are Australian. Australian banks dealt with the Global Financial Crisis better than banks in many other countries. This can be attributed to Australia’s high prudential standards, and Australian banks focus on mainstream domestic activity and limited exposure to exotic derivatives.

Section 2. Liquid Markets 17

Page 20: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

BankingBanking (Branch Office)Banking (Rep Office)Funds ManagementProperty / Infrastructure FundFinancial Planning & Advisory ServicesGeneral InsuranceHealth InsuranceLife InsuranceInvestment AdministrationMortgage Broking ServicesStock Broking Services

ASIA PACIFIC

ChinaFiji

Hong KongIndia

IndonesiaJapanKorea

Malaysia

AFRICA & MIDDLE EASTEUROPE

FranceGermany

IrelandLuxembourg

MaltaNetherlandsSwitzerland

United Kingdom

AMERICAS

CanadaCayman Islands

USABrazil

Non-Specified

South AfricaAfrica Non-Specified

OmanUnited Arab Emirates

Middle East Non-Specified

New ZealandPhilippinesSingapore

SamoaTaiwan

ThailandVietnam

Non-Specified

HONG KONGINDIA

CHINA

FIJI

JAPANSOUTH KOREA

NEW ZEALAND

SINGAPORE

SAMOA

TAIWAN

THAILAND VIETNAM

IRELAND NETHERLANDS

SWITZERLAND

UNITED KINGDOM

CANADA

CAYMAN ISLANDS

UNITED STATES OF AMERICA

OMAN

UNITED ARAB EMIRATES

MALTA

MALAYSIA

INDONESIA

BRAZIL

SOUTH AFRICA

FRANCE

GERMANY

PHILIPPINES

LUXEMBOURG

Australia’s Financial Services Industry: Global Footprint 2010

Source: Based on survey responses from a sample of Financial Services Council members

Australia’s financial services companies have rapidly expanded their operations around the globe. Australia has arguably the most efficient and competitive financial sector in the Asia-Pacific region. The range of Australia’s financial companies’ activities extends to North America, Europe and throughout the Asia-Pacific region, and reflects Australia’s comparative strengths in funds management and investment banking.

Section 2. Liquid Markets 18

Page 21: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Assets of Australia’s Financial Institutions (A$ Billion) 1995 to 2010

RBA = Reserve Bank of Australia. CAGR = Compound annual growth rates.

Note: The US$/A$ exchange rate was US$0.8523 as at 30 June 2010 (sourced from RBA statistics); the nominal value of Australia’s GDP in the year to

31 March 2010 was A$1,268 billion.

1. The sum may not add up due to rounding.

2. The combined assets of building societies and credit unions.

3. The combined assets of public unit trusts, cash management trusts, common funds and friendly societies.

4. The combined assets of general insurance offices and securitisation vehicles.

Sources: Reserve Bank of Australia Statistics, B01 Assets of Financial Institutions (downloaded 15 June 2010); Australian Bureau of Statistics, cat. no. 5206.0,

National Income, Expenditure and Product, Times Series Workbook (released 2 June 2009), Table 3; Austrade

All Registered Life Offices Other Entities Financial Banks (other Other Financial and Managed Other than At the End of Systems (AFS)1 than RBA) ADIs2 Corporations Superannuation Funds3 Clls Overseas Total

March 1995 914 431 26 91 229 55 29 6 47

March 2000 1,665 700 34 131 431 147 78 18 127

March 2005 2,900 1,324 48 163 636 235 191 34 270

March 2010 4,772 2,532 72 162 1,060 308 309 52 278

% of AFS Assets 100.0 53.1 1.5 3.4 22.2 6.5 6.5 1.1 5.8

% of GDP 376.3 199.7 5.7 12.7 83.6 24.3 24.3 4.1 21.9

CAGR % Since 1995 11.6 12.5 6.9 3.9 10.8 12.2 17.0 16.0 12.5

(ADIs)Collective Investment

Institutions (CIIs)

Australia’s large, expanding and mature financial services sector has assets of almost A$4.8 trillion, which is equivalent to around four times nominal GDP. This sector has benefited from almost two decades of stable economic growth, with favourable macroeconomic conditions and sound institutional frameworks reflecting the benefits of wide ranging structural reforms and sound economic policies.

Authorised Deposit- Taking Institutions

Investment Managers Sourced from

Funds Under Management (FUM)

Other Financial

Institutions4

Section 2. Liquid Markets 19

Page 22: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Global Significance of Australia’s Investment Fund Assets PoolInvestment Fund Assets1, US$, December Quarter 2009

$342bn

$235bn

$157bn

$1,199bn

$1,979bn

AUSTRALIA

GLOBAL

ASIA

CurrentValue

Largestin Asia

Australia

4th Largestin theWorld

Australia

Australia’sProjected Growth

$565bn

Canada

$58bn

Taiwan

$130bn

India

$18bn

NewZealand

$265bn

SouthKorea

$381bn

China Singapore

$870bn

HongKong

$661bn

Japan

1990

1995

2000

2015

Brazil Ireland

$661bn

Japan

$729bn $784bn $861bn

UK

$870bn$861bn

Hong Kong

$1,806bn

France

$2,294bn

Luxembourg

$11,121bn

USA

$861bn

Singapore

Note: Circles are not to scale. Data between countries is not strictly comparable.

1. Refers to home-domiciled funds, except Hong Kong, South Korea and New Zealand, which include home- and foreign-domiciled funds. Fund of funds are not included. In this statistical release ‘investment fund’ refers to a publicly offered, open-end fund investing in transferable securities and money market funds. It is equivalent to ‘mutual fund’ in the US and ‘UCITS’ (Undertakings for the Collective Investment of Transferable Securities) in the European Fund and Asset Management Association‘s statistics on the European investment fund industry. Australia’s investment funds in the ICI survey only include consolidated assets of collective investment institutions.

2. Standard & Poor’s Investment Consulting have assumed: A$1 = US$0.80.

Sources: Investment Company Institute, Worldwide Mutual Fund Assets and Flows, December Quarter 2009; Hong Kong’s data, December 2009, sourced from Securities and Futures Commission, Fund Management Activities Survey 2009 (released July 2010); Singapore’s data sourced from the Monetary Authority of Singapore, 2009 Singapore Asset Management Industry Survey; the projected figures of Australia’s investment fund assets were provided by Standard & Poor’s Investment Consulting; Austrade

The size of Australia’s investment fund assets pool and its prospects for substantial growth continue to attract global firms seeking to establish and expand operations in Australia. The growth in assets has been sustained by the Australian Government’s mandatory retirement income scheme and favourable tax treatment of superannuation. This, together with the ready availability of finance skills and expertise, strengthens Australia’s position as a major funds management hub in the Asia-Pacific region.

Section 2. Liquid Markets 20

Page 23: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia’s Managed Funds Assets (A$ Billion) – 1995 to 2010

CAGR = Compound Annual Growth Rate

Note: The US$/A$ exchange rate was US$0.8523 as at 30 June 2010 (sourced from RBA statistics); the nominal value of Australia’s GDP in the year to 31 March 2010 was A$1,268 billion.

1. Figures include superannuation funds held in statutory funds for life insurance offices.

2. The combined assets of cash management trusts, common funds and friendly societies.

3. Total may not add up due to rounding.

Sources: Australian Bureau of Statistics (ABS), cat. no. 5655.0 Managed Funds, Australia, Time Series Workbook (released 27 May 2010), Table 1. Managed Funds, Table 8. Investment Managers; ABS, cat. no. 5206.0, National Income, Expenditure and Product, Times Series Workbook (released 2 June 2009), Table 3; Austrade

Public Australian (less) other Superannuation Life Insurance Unit Entities other Investment ConsolidatedAt the End of Funds Offices1 Trusts Other2 Total3 than Clls Overseas Managers Assets3

March 1995 119 110 36 19 284 29 6 0 319

March 2000 263 168 106 41 578 91 18 13 673

March 2005 448 187 186 48 870 251 34 60 1,095

March 2010 878 182 262 46 1,368 319 52 11 1,729

% of Total FUM 50.8 10.5 15.2 2.7 79.1 18.5 3.0 0.6 100.0

% of GDP 69.2 14.3 20.7 3.6 107.9 25.2 4.1 0.9 136.3

% CAGR Since 1995 14.2 3.4 14.1 6.2 11.1 17.3 16.0 N/A 11.9

Collective Investment Institutions (CIIs) Consolidated Assets FUM of Investment Managers Sourced from Total

FUNDS UNDER MANAGEMENT (FUM) TOTAL

Total investment fund assets in Australia have increased more than five-fold since 1995, with a compound annual growth rate of 12 per cent. Consolidated assets under management are around A$1.7 trillion (US$1.5bn). Superannuation (pension) funds dominate the Australian investment management industry, representing around 50 per cent of the market. Since March 1995, superannuation funds under management have increased by 14 per cent (compounded annually) to A$878 billion (US$750bn). The total market share of superannuation fund assets, including funds held by Australia’s life insurance offices, represents more than 60 per cent of Australia’s total investment funds.

Section 2. Liquid Markets 21

Page 24: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australian Investment Managers Asset Allocation – % Share

Source: Morningstar InvestorSupermarket, Market Wrap, December 2009, Data File, Worksheet 4; Austrade.

0

4

8

12

16

20

24

28

32

Dec07

Mar08

Jun08

Sep08

Dec08

Mar09

Jun09

Sep09

Dec09

Alternatives

Property and Mortgage

Australian Fixed Interest

Other (including Cash, Currency/TAA)

Overseas Equity & Fixed Interest

Australian Equity

The portfolio allocations of Australia’s investment managers continue to see significant exposures to global assets and to alternatives. Over 22 per cent of fund manager assets are allocated to global markets, comprising 16.9 per cent to international shares and 5.7 per cent to international fixed interest in 2009. Allocations to alternatives exceeded 5 per cent.

Section 2. Liquid Markets 22

Page 25: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Global Pension Assets

(US$ Billion) Market Share % As %of GDP 1-year % 10-year CAGR %

Total Assets Growth Rates (local currency)

1. Includes Individual Retirement Arrangements (IRAs)

2. Excludes Personal and Stakeholder defined contribution (DC) assets

CAGR = Compound annual growth rates.

e = Estimates.

Sources: Towers Watson, 2010 Global Pension Asset Study January 2010; Austrade

Australia has the world’s fifth largest pension fund market, with total assets of around US$1 trillion under management. Australia has one of the most developed pension markets in the world, underpinned by its mandatory retirement income scheme.

End End End End End End (31/12/08- (31/12/99-Market 1999 2009e 1999 2009e 1999 2009e 31/12/09) 31/12/09)

USA1 10,195 13,196 62.5 56.7 109 93 12.2 2.6

Japan 2,630 3,152 16.1 13.5 54 61 6.1 0.8

UK2 1,385 1,791 8.5 7.7 92 80 13.6 2.8

Canada 652 1,213 4.0 5.2 96 84 12.7 3.1

Australia 271 996 1.7 4.3 67 93 8.5 10.4

Netherlands 400 990 2.5 4.2 103 120 14.2 5.6

Switzerland 310 583 1.9 2.5 123 113 12.8 2.0

Germany 188 411 1.2 1.8 9 12 6.8 4.3

Brazil 70 392 0.4 1.7 12 22 54.3 18.3

South Africa 76 201 0.5 0.9 57 63 12.1 12.3

France 70 178 0.4 0.8 5 6 13.8 5.9

Ireland 49 102 0.3 0.4 54 43 12.2 3.8

Hong Kong 23 85 0.1 0.4 14 41 23.3 14.0

Total 16,318 23,290 100.0 100.0 76 70 15.6 6.6

Section 2. Liquid Markets 23

Page 26: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

World’s 25 Largest Sovereign Wealth Funds by Assets Under Management1

1. All figures quoted are from official sources, or where the institutions concerned do not issue statistics of their assets, from other publicly available sources. Some of these figures are best estimates as market values change day to day. 2. This number is a best guess estimation. 3. This includes the oil stabilisation fund of Russia. 4. Australian number includes total assets under management of the Future Fund (US$59.1bn), Queensland Investment Corporation (QIC, A$51.6bn or US$44.0bn) and Victorian Funds Management Corporation (VFMC, A$31.1bn or US$26.5bn). QIC has a number of funding sources with the majority sovereign in nature.

Sources: Sovereign Wealth Fund Institute (Data updated June 2010); Austrade

Sovereign Wealth Funds (SWFs) have existed for decades, but their total size worldwide has increased dramatically over the past 10 years. Most of the growth has been the result of a surge in current account surpluses from exports of oil and other commodities, fiscal surpluses, accumulated public savings, large privatisation receipts or pension reserves. Australia’s SWFs, which include the Future Fund and State Government managed SWFs, are among the largest in the world.

Rank Country Fund Name Assets (US$ Billion)

1 UAE – Abu Dhabi Abu Dhabi Investment Authority 627

2 Norway Government Pension Fund – Global 443

3 Saudi Arabia SAMA Foreign Holdings 415

4 China SAFE Investment Company2 347

5 China China Investment Corporation 289

6 Singapore Government of Singapore Investment Corporation 248

7 Hong Kong Hong Kong Monetary Authority Investment Portfolio 228

8 Kuwait Kuwait Investment Authority 203

9 China National Social Security Fund 147

10 Russia National Welfare Fund3 143

11 Singapore Temasek Holdings 133

12 Australia Future Fund, QIC and VFMC4 13013 Libya Libyan Investment Authority 70

14 Qatar Qatar Investment Authority 65

15 Algeria Revenue Regulation Fund 55

16 Kazakhstan Kazakhstan National Fund 38

17 US – Alaska Alaska Permanent Fund 36

18 Ireland National Pensions Reserve Fund 33

19 South Korea Korea Investment Corporation 30

20 Brunei Brunei Investment Agency 30

21 France Strategic Investment Fund 28

22 Malaysia Khazanah Nasional 25

23 Iran Oil Stabilisation Fund 23

24 Chile Social and Economic Stabilization Fund 22

25 UAE – Dubai Investment Corporation of Dubai 20

Section 2. Liquid Markets 24

Page 27: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Size of Key Stock Markets in the Asia-Pacific RegionMarket Capitalisation of Floating Stocks (US$ Billion, 30 July 2010)

936

208

2561

84104

17

US

$ B

illio

n

647

558

484

361356

SouthKorea

ChinaAustralia Taiwan HongKong

Singapore Malaysia ThailandIndonesia Philippines NewZealand

India

USA 12,206

Japan 2,495

UK 2,362

Canada 1,275

France 1,059

Switzerland 860

Germany 837

1,000

900

800

700

600

500

400

300

200

100

0

Sources: Standard & Poor’s, Global Broad Market Index, July 2010; Austrade

With 2,050 listed companies, the Australian stock market is currently the largest liquid stock market in the Asia Pacific ex-Japan at US$936 billion. The market capitalisation of floating stocks in Australia is more than double that of Hong Kong (US$361 billion) and more than four times larger than that of Singapore. Australia’s strong, liquid, transparent and efficient stock market further strengthens its position as a leading financial services centre.

Section 2. Liquid Markets 25

Page 28: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

International and Domestic Debt Securities – Amount OutstandingResidence of Issuer, US$ Billion

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

China SouthKorea

Australia India Taiwan Malaysia Thailand Singapore HongKong

Indonesia Philippines NewZealand

Domestic Securities (Dec 2009) International Securities (Mar 2010)

5530

25

8180183218

603

1,085

874

2,565

379822

10047

11652

10

USA 25,065 6,140

Japan 11,522 171

Germany 2,806 2,052

UK 1,559 3,665

France 3,156 1,814

Italy 3,688 1,098

Canada 1,300 578

US

$ B

illio

n

550

125

30

5 25

Sources: Bank for International Settlements, Quarterly Review, June 2010, Table 11 and Table 16A; Austrade

Australia has US$1.4 trillion debt securities outstanding – the region’s second largest amount (ex Japan), and is a regional leader in the issuance of both international and domestic debt securities.

Section 2. Liquid Markets 26

Page 29: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Real Estate Investment Trust (REIT) Market CapitalisationDecember 2009, US$ Billion

271.85

70.75

64.53

37.18

29.43

23.13

11.23

9.52

6.76

3.40

2.54

1.89

1.54

0.71

0.13

20.61

US$ Billion

USA

Australia

France

UK

Japan

Canada

Singapore

Netherlands

Hong Kong

New Zealand

Belgium

Turkey

South Africa

Malaysia

Germany

South Korea

0 50 100 150 200 250 300

Note: Insufficient data for Germany, the Netherlands and Turkey

Sources: Ernst & Young, Global Real Estate Investment Trust Report 2010, Against All Odds, p.12; Austrade

Australia is recognised as having the world’s largest Real Estate Investment Trusts market outside the United States. Its total market capitalisation is estimated at more than US$70 billion, which is significantly larger than the total market capitalisation of the United Kingdom (US$37.2 billion) and more than the combined value (US$63.8 billion) of Japan, Singapore, Hong Kong, Malaysia and South Korea.

Section 2. Liquid Markets 27

Page 30: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Asia-Pacific Hedge Fund Assets Under ManagementDecember 2009, US$ Billion

Hong Kong $31.1 (23.5%)

Australia2 $29.3 (22.1%)

USA1 $26.7 (20.2%)

UK1 $11.9 (9.0%)

Singapore $17.6 (13.3%)

Japan $10.2 (7.7%)

Other Asia3 $5.6 (4.2%)

1. Deploying hedge fund strategies in Asian markets.

2. Manager assets only, excluding fund of hedge funds and Australian investor allocations to offshore managers.

3. Other countries deploying hedge fund strategies in Asian markets.

Sources: Asiahedge; Austrade

Australia’s hedge fund assets under management reached US$29.3 billion in December 2009, the second largest market in the region. More than 80 per cent of Australia’s hedge fund assets are deployed in markets outside the country – demonstrating the industry’s international sophistication.

Section 2. Liquid Markets 28

Page 31: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australian Residential Mortgage-Backed Security IssuanceFinancial year ending 30 June, A$ Billion

0

10

20

30

40

50

60

70

80Offshore Purchases by AOFMDomestic (non-AOFM)

A$ B

illio

n

2001 2002 2003 2004 2005 2006 2007 2009 2010

4353

6356

6370

87

106

2008

AOFM = The Australian Office of Financial Management, a specialised agency responsible for the management of Australian Government debt, the Government’s cash balances and selected investments in financial assets.

Sources: Reserve Bank of Australia; Austrade

Between June 2007 and March 2010 the Australian assets of residential mortgage-backed securities (RMBs) contracted 42 per cent, from A$204 billion to A$117 billion, as few primary issues were released and existing portfolios were in run-off. RMBS issuance reduced substantially following the on-set of the Global Financial Crisis because overseas sources of funding were no longer available. The primary market issuance of Australian RMBS reduced by 89 per cent to $A7.8 billion in 2007-08. As global financial markets recover, the Australian market has begun to show signs of improvement and RMBS issuance recovered to A$12.4 billion in 2008-09, and rose again to A$16.6 billion in 2009-10. This will continue to be underpinned by the strength of the Australian economy, improved residential property markets, the quality of mortgages and origination practices, and a robust institutional and regulatory environment.

Section 2. Liquid Markets 29

Page 32: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

World Insurance Markets – 2009

Penetration: Density: World Premium Volume % Share of % of Per Capita Ranking1 Country US$ Billion World Market Country’s GDP US$

Americas 1 USA 1,239.7 28.03 8.0 3,710 9 Canada 98.8 2.43 7.4 2,944 15 Brazil 48.8 1.20 3.1 252Europe 3 UK 309.2 7.61 12.9 4,579 4 France 283.1 6.96 10.3 4,269 5 Germany 238.4 5.86 7.0 2,878 6 Italy 169.4 4.17 7.8 2,729 8 Netherlands 108.1 2.66 13.6 6,555 11 Spain 82.8 2.04 5.7 1,802 16 Switzerland 48.5 1.19 9.8 6,258 17 Ireland 44.6 1.10 8.9 4,516 18 Belgium 40.5 1.00 8.0 3,494Asia-Pacific 2 Japan 506.0 12.44 9.9 3,979 7 China 163.0 4.01 3.4 121 10 South Korea 92.0 2.26 10.4 1,890 12 India 65.1 1.60 5.2 54 13 Taiwan 63.6 1.57 16.8 2,752 14 Australia 60.3 1.48 6.4 2,833 24 Hong Kong 23.0 0.57 11.0 3,304 31 Singapore 14.2 0.35 6.8 2,558 33 Thailand 10.5 0.26 4.0 154 35 Malaysia 8.8 0.22 4.4 322 40 Indonesia 7.3 0.18 1.3 32 42 New Zealand 6.7 0.16 5.8 1,567 45 UAE 5.1 0.13 2.5 1,112 54 Philippines 2.4 0.06 1.5 26Other Countries 328.6 10.52 NA NAWorld 4,066.1 100.00 7.0 595

1. Countries are ranked by the US$ value of premium volume in 2009. NA = Not Applicable

Sources: Swiss Re, Sigma No 2/2010, World Insurance in 2009, Tables III, VIII and IX; Austrade

Australia’s insurance market is the 14th largest in the world and the sixth largest in the Asia-Pacific region behind Japan, China, South Korea, India and Taiwan. The country’s mature, innovative and well-regulated insurance industry, together with its strong legal, accounting, education, human resource and IT capacities, underpin its position as a financial services hub in the region.

Section 2. Liquid Markets 30

Page 33: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

High Net Worth Individuals by Country

The private banking industry in Australia has benefited from almost twenty years of sustained economic growth to become the third largest private wealth market in the Asia Pacific and the tenth largest in the world. In 2009, the HNWI population in Australia rose by 34.4 per cent to 173,600, making it the strongest rebound among the 12 countries with the largest numbers of HNWIs. Despite its relatively small population, Australia’s pool of affluent individuals is larger than that of Brazil (146,700), Russia (117,700), and India (126,700), and is 36 per cent of China’s total. Strategically, Australia offers a competitive regional location for providing wealth management services.

0

500

1,000

1,500

2,000

2,500

3,000

Num

ber

of

HN

WIs

(in

tho

usan

ds)

2,460

2,866

1,366

1,650

810 861

365477

362448

346 383

213 251185 222

164 179 129 174 131 147 127 143

20092008

HNWI Growth Rate % (2008-2009)

USA

16.5%

Japan

20.8%

Germany

6.4%

China

31.0%

UK

23.8%

France

10.8%

Canada

17.9%

Switzerland

19.7%

Italy

9.2%

Australia

34.4%

Brazil

11.9%

Spain

12.5%

1. High net worth individuals (HNWIs) are defined as those having investable assets of US$1 million or more, excluding primary residence, collectables and consumer durables.

Sources: Capgemini/Merrill Lynch Wealth Management Bank of America Corporation, World Wealth Report 2010, page 6; Austrade

Section 2. Liquid Markets 31

Page 34: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Worldwide Announced Mergers and Acquisitions by Target Nation

1. Totals are the sum of Americas, Western Europe, Asia-Pacific and others, and may not add up due to rounding.

2. Includes Australasia, Japan, North Asia, South East Asia, South Asia and Central Asia. 3. Includes Eastern Europe, Middle East and Africa.

Sources: Thomson Reuters, Mergers and Acquisitions Review, Financial Advisors, First Half 2010, Page 2; Austrade

Target Region/ Nation (US$ Billion) Market Share % No. Market Share %

Worldwide1 1,065.0 100.0 19,230 100.0Americas 523.4 49.1 5,595 29.1 USA 364.6 34.2 3,612 18.8 Canada 39.4 3.7 1,119 5.8 Mexico 47.1 4.4 113 0.6 Brazil 44.2 4.1 268 1.4 Chile 5.4 0.5 74 0.4Western Europe 240.6 22.6 4,801 25.0 UK 70.2 6.6 1,179 6.1 Spain 36.0 3.4 453 2.4 France 26.9 2.5 619 3.2Asia-Pacific2 231.5 21.7 6,121 31.8 Australasia 54.5 5.1 919 4.8 Australia 43.7 4.1 826 4.3 Papua New Guinea 8.8 0.8 5 0.0 Japan 31.5 3.0 1,114 5.8 North Asia 90.6 8.5 2,285 11.9 China 53.2 5.0 1,500 7.8 Hong Kong 23.5 2.2 350 1.8 South East Asia 25.3 2.4 1,168 6.1 Indonesia 6.1 0.6 258 1.3 Malaysia 5.8 0.5 348 1.8 South Asia 28.3 2.7 614 3.2 Central Asia 1.2 0.1 21 0.1Other3 69.6 6.5 2,713 14.1

01 Jan 2010 – 30 Jun 2010

Rank Value

01 Jan 2010 – 30 Jun 2010

Number of Deals

Worldwide Merger and Acquisition (M&A) activity has improved during the first half of 2010, as the global financial markets recover. The value of worldwide M&A totalled US$1.1 trillion during the period, a 9.4 per cent increase from levels during the first half of 2009. In the first half of 2010, Australia’s volume in announced deals was US$44 billion. Excluding a single significant announced deal in first half 2009 (around US$58bn), Australia’s volume improved from US$32 billion. Overall, Australia’s M&A announced deals ranked the sixth largest in the world with a global market share of 4.1 per cent, after the United States, the United Kingdom, China, Mexico and Brazil.

Section 2. Liquid Markets 32

Page 35: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia’s highly skilled and multilingual workforce ranks among the best in the world.

Skilled Workforce

Employed Persons in Australia’s Financial and 34 Insurance Services Sector

Rising Productivity and Falling Labour Costs in Australia 35

Employed Persons in the Services Sector 36

Workforce Skill Base Comparisons 37

Selected Demographic Comparisons 38

Salary Survey of Financial Services Roles in Sydney 39

Australia’s Labour Force by Birthplace 40

Foreign-Born Labour Force as a Percentage of Labour Force 41

Finance and Insurance Employed Persons with 42 Post-school Qualifications

Percentage of Employed Persons with Tertiary Education 43

by Industry Sector

Tertiary-Level Graduates in Employment as a Percentage 44 of Total Employment

International Students – Top 15 Source Countries and Fields 45 of Education

SECTION 3

Skilled Workforce

Imag

e co

urte

sy o

f I&

I NS

W

Page 36: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Employed Persons in Australia’s Financial and Insurance Services SectorTrend Terms

Sources: Australian Bureau of Statistics, cat. no. 6291.0.55.003 - Labour Force, Australia, Detailed, Quarterly, May 2010 Table 04. Employed Persons by Industry (released 17 June 2010); Austrade

280

300

320

340

360

380

400

420

Num

ber

of

emplo

yed p

erso

ns (

’00

0)

May

94

Nov

94

May

95

Nov

95

May

96

Nov

96

May

97

Nov

97

May

98

Nov

98

May

99

Nov

99

May

00

Nov

00

May

01

Nov

01

May

02

Nov

02

May

03

Nov

03

May

04

Nov

04

May

05

Nov

05

May

06

Nov

06

Nov

07

May

07

Nov

08

May

08

May

09

Nov

09

May

10

Australia has 400,000 people employed in its large and expanding finance sector. This skilled, multilingual and relatively low cost workforce is one of Australia’s great strengths as a financial services centre in the Asian time zone. Excellent education and training facilities, a strong regulatory environment, sophisticated business infrastructure and a large skilled immigration intake enhance these workforce characteristics.

Section 3. Skilled Workforce 34

Page 37: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Rising Productivity and Falling Labour Costs in Australia – 1994 to 2010Trend Terms

Sources: Australian Bureau of Statistics, cat. no. 5206.0, Australian National Accounts: National Income, Expenditure and Product, Table 1. Key National Accounts Aggregates, Time Series Workbook; Austrade

80

90

100

110

120

130

140

GDP per Hour Worked Market Sector Index

Real Unit of Labour Costs (Non-farm) Index

Mar

-95

Sep

-94

Sep

-95

Mar

-96

Sep

-96

Mar

-97

Sep

-97

Mar

-98

Sep

-98

Mar

-99

Sep

-99

Mar

-00

Sep

-00

Mar

-01

Sep

-01

Mar

-02

Sep

-02

Mar

-03

Sep

-03

Mar

-04

Sep

-04

Mar

-05

Sep

-05

Mar

-06

Sep

-06

Mar

-07

Sep

-07

Mar

-08

Sep

-08

Mar

-09

Sep

-09

Mar

-10

Index

(S

ep 1

994

= 1

00)

Australia has enjoyed strong and sustained labour productivity growth over the last two decades. This can, in part, be attributed to the country’s highly educated workforce, which is known for its strong work ethic and positive approach to change. In addition, real unit labour costs have fallen consistently since 2000.

Section 3. Skilled Workforce 35

Page 38: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Employed Persons in the Services Sector – 2007Percentage of total civilian employment (OECD average: 70.1)

Sources: Organisation for Economic Co-operation and Development, OECD in Figures 2009 Edition; Austrade

0

10

20

30

40

50

60

70

80 78.8

77.9

76.3

76.1

76.1

76.0

75.9

75.1

74.2

73.7

73.6

73.4

72.4

71.0

69.

7

67.9

67.7

67.0

66.

9

66.

7

66.

1

66.

0

65 .

5

62 .

4

59.

3

57.6

56 .

4

56.

1

54.

5

49.

8

US

A

Net

herlan

ds

UK

Luxe

mbour

g

Sw

eden

Norw

ay

Can

ada

Australia

Fran

ce

Bel

gium

Den

mar

k

Icel

and

Sw

itzer

land

New

Zea

land

Finl

and

Japan

Ger

man

y

Irel

and

Aus

tria

Sout

h K

ore

a

Gre

ece

Spai

n

Ital

y

Hun

gary

Mex

ico

Port

ugal

Slo

vak

Rep

ublic

Cze

ch R

epub

lic

Pola

nd

Turk

ey

Australia’s economy is service-based, with over 75 per cent of the total workforce employed by the services sector. Other major economies with similar levels of employment in services include the United States, the United Kingdom, France, Canada and the Netherlands.

Section 3. Skilled Workforce 36

Page 39: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Workforce Skill Base Comparisons

Sources: (a) Institute for Management Development (IMD), Switzerland, IMD World Competitiveness Online 1995-2010 (Updated: May 2010, 58 economies); (b) World Economic Forum, Switzerland and Harvard University, Global Competitiveness Report 2009-10 (133 economies); (c) The United Nations Development Programme (UNDP), Human Development Report 2009 (182 economies), Statistical Annex, Table H; Austrade

Australia China India Hong Kong Japan Singapore USA UK

World Competitiveness Yearbook 2010 Rankinga in:

Attracting and Retaining 3 16 8 23 13 2 10 39

University Education 7 49 22 23 36 1 10 28

Labour Productivity (PPP) 9 55 58 22 25 21 3 14

Management Education 18 46 13 27 40 2 8 29

Global Competitiveness Report 2009-10 Rankingb in:

Secondary Enrolment Rate 1 89 107 73 24 17 43 36

Reliance on Professional Management 7 46 30 38 19 8 11 13

Quality of Scientific Research Institutions 10 35 25 34 15 12 2 4

Tertiary Enrolment Rate 13 80 100 66 32 29 6 30

UNDP’s Human Development Report 2009 Rankingc in:

Human Development Index (HDI) 2 92 134 24 10 23 13 21

International studies confirm the high skill level of Australia’s workforce, particularly for financial services. In many critical categories, such as University Education, Labour Productivity and Reliance on Professional Management, Australia’s workforce rates amongst the best in the world. This quality is an important factor for global finance service firms deciding to set up or expand their operations in Australia and the Asia-Pacific region.

Section 3. Skilled Workforce 37

Page 40: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Selected Demographic Comparisons1 – Mid Year 2009

1. For New York City, the closest available figure for population, mid-2008 is used. The latest data available for students is from 2008. State-wide public and private institution students (studying in Australia) data was used for Sydney (New South Wales) and Melbourne (Victoria). For Singapore, data represents 2008 full-time enrolment. For London and Hong Kong, data represents 2008-09 academic year.

Sources: AUSTRALIA: Australian Bureau of Statistics (ABS), cat. no. 3101.0, Australian Demographic Statistics, Dec 2009; ABS cat. no. 6291.0.55.001 Labour Force; ABS cat. no. 6291.0.55.003 E03_aug 94 – Employed Persons by Sex, Industry, Capital City-Balance of State, Hours Worked; Department of Education, Employment and Workplace Relations; Austrade. USA: US Census Bureau, Population Division, Table 27: Incorporated Places over 100,000 or more Inhabitants in 2008 population; State of New York and U.S. Bureau of Labour Statistics, Quarterly Census of Employment and Wages; U.S. Department of Labour, Bureau of Labour Statistics, Status of the Civilian Labour Force. UK: Office of National Statistics (ONS), Statistical Bulletin, Population Estimates June 2010; ONS Time series Labour Market Statistics 18A Regional Labour Market Summary; London Development Agency, Mayor of London, The Mayor’s Economic Development Strategy for London, Table 1: London Higher, HESA Fact sheets, Student numbers in London 2008-09. HONG KONG: Census and Statistics Department, Hong Kong in Figures 2010 Edition, February 2010; Education Bureau. SINGAPORE: Ministry of Manpower (MOM), online Statistics, Labour Force; MOM Research and Statistics Department, Labour Market, Second Quarter 2009 Table 1.1; Statistics Singapore Ministry of Education, Education Factsheet 2009

(’000) Melbourne Sydney New York City London Hong Kong Singapore

Population 3,996 4,504 8,364 7,754 7,004 4,988

Labour Force 2,114 2,379 3,994 4,052 3,695 3,030

Employed Persons – All Industries 1,979 2,223 3,609 3,676 3,504 2,906

Finance and Insurance 90 142 315 332 210 158

% of Total Employed Persons 4.5 6.4 8.7 9.0 6.0 5.4

Universities – Total Enrolled Students 179 251 446 426 102 53

% of Total Population 4.5 5.6 5.3 5.5 1.5 1.1

Australia has a larger population and labour force than that of Singapore and Hong Kong combined and there are significantly more people employed in financial services in Sydney and Melbourne combined than in either Singapore or Hong Kong. Similarly, there are many more students studying in universities in Australia than in other centres in the Asian time zone. Both Sydney and Melbourne have around five per cent of their population enrolled as tertiary students, which is comparable to that of Greater London and New York City, and well above that of Hong Kong and Singapore. This student pool represents a pipeline of talent underpinning Australia’s strong, highly skilled, financial services labour force.

Section 3. Skilled Workforce 38

Page 41: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Salary Survey of Financial Services Roles in Sydney – 2010

Figures above are basic salaries, inclusive of superannuation, but exclusive of benefits/bonuses, unless otherwise specified. Note: The US$/A$ exchange rate was US$0.8523 as of 30 June 2010 (sourced from Reserve Bank of Australia statistics).

1. Post Qualification Experience.

Sources: Robert Walters Salary Survey 2010, pages 186, 188, 198 and 200; Austrade

Role (Qualification) Experience From To

Banking and Financial Services (A$’000 Per Annum) Accounts Clerk 45 55

Assistant Accountant 45 65

Business Analyst – CA/CPA 0-2 yrs 55 85

Business Analyst – CA/CPA 3-5 yrs 85 120

Financial Accountant – CA/CPA 0-2 yrs 55 75

Financial Accountant – CA/CPA 3-5 yrs 80 125

Fund Accountant – CA/CPA 0-2 yrs 45 65

Fund Accountant – CA/CPA 3-5 yrs 65 120

Management Accountant – CA/CPA 0-2 yrs 50 75

Management Accountant – CA/CPA 3-5 yrs 80 120

Tax Accountant 0 -2 yrs 50 80

Tax Accountant 3-5 yrs 80 120

Legal – Financial Services1

Investment Banking 0-2 yrs 80 105

Investment Banking 2-5 yrs 90 160

Investment Banking 5-10 yrs 140 225

Funds Management 0-2 yrs 65 100

Funds Management 2 -5 yrs 90 150

Funds Management 5-10 yrs 140 225

Retail Banking 0-2 yrs 65 95

Retail Banking 2-5 yrs 90 150

Insurance 0-2 yrs 60 90

Insurance 2-5 yrs 75 140

Role (Qualification) Experience From To

Banking Operations (A$’000 Per Annum)

Corporate Actions Clerk 0-2 yrs 45 65

Corporate Actions Manager 3-5 yrs 100 140

Derivatives Documentation Clerk 0-2 yrs 45 60

Derivatives Operations Manager 3-5 yrs 95 135

Equities Clerk 0-2 yrs 45 60

Equities Supervisor 3-5 yrs 75 100

Fixed Income Clerk 0-2 yrs 45 60

Fixed Income Operations Manager 6+yrs 120 160

Fund Administrator – Custody 0-2 yrs 40 55

Fund Administrator – Fund Management 0-2 yrs 40 55

FX Clerk 0-2 yrs 45 55

FX Operations Manager 6+yrs 100 140

Risk Management, Compliance and Audit

Compliance – Degree 0-2 yrs 55 80

Compliance – Degree 3-5 yrs 80 120

Credit Risk Analyst 0-2 yrs 55 80

Credit Risk Analyst 3-5 yrs 80 120

Internal Auditor – CA/CPA 0-2 yrs 55 80

Internal Auditor – CA/CPA 3-5 yrs 80 120

Market Risk – Degree 0-2 yrs 55 80

Market Risk – Degree 3-5 yrs 90 140

Operation Risks Manager 0-2 yrs 55 80

Operation Risks Manager 3-5 yrs 80 120

Salary levels in Australia for skilled professionals are generally lower than those in comparable financial services centres around the world. The availability of a large, relatively low cost, highly skilled and multilingual domestic workforce reduces the need to import more expensive expatriates. In addition, expatriate remuneration in Australia is generally lower than in competing markets, including Tokyo, Hong Kong and Singapore. This reflects overall cost of living and quality of life considerations.

Section 3. Skilled Workforce 39

Page 42: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia’s Labour Force by Birthplace – May 2010Total labour force as at May 2010: 11,664,100

Sources: Australian Bureau of Statistics, cat. no. 6105.0, Australian Labour Market Statistics, July 2010 (released 16 July 2010); Austrade

AustralianBorn73.1%

OverseasBorn26.9%

Americas 1.3%

Sub-Saharan Africa 1.5%

North West Europe 1.3%

North Africa & The Middle East 1.3%

Southern & Central Asia 2.8%

North East Asia 2.6%

Southern & Eastern Europe 2.7%

South East Asia 3.8%

Oceania & The Antarctic 3.7%

UK & Ireland 6.0%

More than a quarter of Australia’s labour force (over 3.1 million), was born overseas, with substantial representation from European (1.2 million) and Asian (1.1 million) countries. This underlines Australia’s capacity to offer workforce solutions to those organisations requiring multilingual staff.

Section 3. Skilled Workforce 40

Page 43: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Foreign-Born Labour Force as a Percentage of Labour Force – 2007

0 5 10 15 20 25 30 35 40 45 50

46.5

25.8

25.4

23.8

21.2

16.9

16.6

16.3

15.5

13.8

13.6

12.2

11.9

10.9

11.0

9.1

8.7

8.0

3.1

2.1

0.3Japan1

South Korea1

Norway

Denmark

Portugal

Finland

Greece

Italy

Belgium

Netherlands

France

UK

Germany

Sweden

Ireland

USA

Austria

Spain

CanadaNew Zealand

Switzerland

Australia

Luxembourg

8.3

8.1

1. Foreign population instead of foreign-born population.

Sources: Organisation for Economic Co-operation and Development, OECD in Figures 2009 Edition; Austrade

According to OECD in Figures 2009, Australia’s overseas-born labour force as a percentage of total labour force (25.8 per cent) is ranked second after Luxembourg among all OECD countries. Australia is the most culturally diverse country in the Asia-Pacific region and one of the most multicultural countries in the world.

Section 3. Skilled Workforce 41

Page 44: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Finance and Insurance Employed Persons with Post-school Qualifications – May 2009Total employed persons in finance and insurance in Australia as at May 2009: 396,200

Sources: Australian Bureau of Statistics, cat. no. 6227.0, Education and Work, May 2009, page 19 (released 24 November 2009); Austrade

Other136,800

Postgraduate Degree34,200

Graduate Diploma/Graduate Certificate9,700

Bachelor Degree113,700

Advanced Diploma/Diploma49,900

Certificate I, II, III & IV51,900

TertiaryQualifications

157,600

OtherPost-school

Qualifications101,800

Australia’s financial services workforce is highly educated. In May 2009, around 65 per cent (or 259,400) of those employed in financial services had post-school qualifications ranging from vocational certificates through to postgraduate degree-level qualifications.

Section 3. Skilled Workforce 42

Page 45: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Percentage of Employed Persons with Tertiary Education1 by Industry Sector – May 2009

1. In this statistical release, tertiary education refers to Bachelor Degree or higher.

Sources: Australian Bureau of Statistics, cat. no. 6227.0, Education and Work, May 2009, page 19 (released 24 November 2009); Austrade

0 10 20 30 40 50 60 70

All Industry Average: 26.1%

6.2

9.3

10.4

11.4

11.9

12.3

12.6

13.9

13.9

14.8

17.4

18.4

38.4

39.0

39.8

40.0

54.9

62.0

Mining

Construction

Agriculture/Forestry/Fishing

Accommodation/Food Services

Transport/Postal/Warehousing

Retail Trade

Manufacturing

Rental/Hiring/Real Estate Services

Administrative/Support Services

Wholesale Trade

Electricity/Gas/Water/Waste Services

Arts/Recreation Services

Information Media/Telecommunications

Public Administration/Safety

Financial/Insurance Services

Healthcare/Social Assistance

Professional/Scientific/Technical Services

Education/Training

The finance and insurance industry is one of the country’s most educated sectors, with almost 40 per cent of people employed in the industry holding a Bachelor Degree or higher.

Section 3. Skilled Workforce 43

Page 46: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Tertiary-Level Graduates in Employment as a Percentage of Total Employment – 2007

Sources: Organisation for Economic Co-operation and Development, Science, Technology and Industry Scoreboard 2009, Chapter 5; Austrade

0

4

8

12

16

20

24

28

32

36

40

44

48

5224.7

27.3Per

Cen

t

Can

ada

US

A

Japan

New

Zea

land

Finl

and

Bel

gium

Australia

Sout

h K

ore

a

Irel

and

Norw

ay UK

Spai

n

Sw

itzer

land

Net

herlan

ds

Den

mar

k

Sw

eden

Icel

and

Fran

ce

Lu

xem

bour

g

Ger

man

y

Gre

ece

Pola

nd

Hun

gary

Aus

tria

Mex

ico

Slo

vak

Rep

ublic

Ital

y

Port

ugal

Cze

ch R

epub

lic

Turk

ey

21.9

17.1

21.722.7

19.718.8

12.6

18.6 19.1

17.1 16.4

11.9

15.5

17.818.9

15.8 15.914.1

11.3 12.2

13.5

11.6

8.27.0

8.4 8.5 9.3

6.6

4.7

22.525.7

19.4

18.6

19.318.1

18.118.717.017.824.6

15.115.6

14.716.618.922.6

10.6

15.316.8

16.7

8.39.011.1

12.210.5

6.510.49.1

MenWomen

In addition to offering cultural and linguistic diversity, Australia’s 11 million-strong workforce is highly skilled and well-educated. Almost 38 per cent of those employed are tertiary-level graduates. This ratio is the seventh highest among 30 OECD countries, and above that of UK (35.8 per cent), France (31.0 per cent), Germany (28.1 per cent) and Italy (16.8 per cent).

Section 3. Skilled Workforce 44

Page 47: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

International Students1 – Top 15 Source Countries and Fields of Education – 2008

1. Total number of onshore (223,508) and offshore students (70,655).

Sources: Department of Education, Employment and Workplace Relations, Selected Higher Education Statistics 2008, Table 53 All Overseas Students by Country of Permanent Home Residence and Broad Field of Education, Full Year 2008; Austrade

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000

China

Singapore

Malaysia

India

Hong Kong

Indonesia

Vietnam

USA

South Korea

Sri Lanka

Canada

Thailand

UAE

Japan

Taiwan

North East Asia 66,281 37,087

South East Asia 47,591 45,556

Other Regions 39,458 58,190

All Regions – 2008 153,330 140,833

All Regions – 2007 140,600 132,499

% Change 9.1 6.3

Management and Commerce

Other Courses

Australia is the ‘first choice’ education destination across the Asia-Pacific region, with around 300,000 overseas students now studying in Australia’s tertiary institutions. Australia is now a hub for financial services education in the region, with over 50 per cent of overseas students in Australia studying Management and Commerce.

Section 3. Skilled Workforce 45

Page 48: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia’s technologically sophisticated and competitively priced infrastructure adds to the country’s attractiveness.

Advanced Infrastructure

SECTION 4

Advanced InfrastructureGlobal Prime Office Occupancy Costs 47

Australia’s Businesses with Internet Access and Broadband 48 as Main Type of Internet Connection

Asia-Pacific Financial Services ICT Spending 49

Economist Intelligence Unit Digital Economy Rankings 50

United Nations e-Government Survey 2010 51 – e-Participation Index

Page 49: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Global Prime Office Occupancy Costs1 – 2010

1. Unless otherwise indicated, all data reflect office space in the central commercial district. The local rent data for American, European and Middle East markets is expressed in either gross or net terms depending on the prevailing local practice. All Asian markets are reported on a net floor basis, including all occupancy expenses. Prime gross effective rents are used for occupancy costs.

Sources: CB Richard Ellis Global Research and Consulting, Global Office Rents, May 2010; Austrade

0 20 40 60 80 100 120 140 160 180 200

182.94153.20

143.99125.76

113.23110.07

108.92100.00

96.9081.84

80.2780.25

77.9372.7171.82

69.6464.51

63.4560.1459.8659.29

57.4953.2952.96

51.0848.56

45.0940.46

36.4333.2833.1731.53

28.7424.3823.54

17.89

China

JakartaBangkok

ManilaLos Angeles (CBD)

AdelaideSan Francisco

BangaloreMelbourneBrisbane

TaipeiHo Chi Minh City

BeijingShanghai (Puxi)

SydneySingapore

PerthToronto (CBD)

Shanghai (Pudong)Rome

New York MidtownFrankfurt am Main

SeoulAbu Dhabi

MilanGeneva

Hong Kong (Citywide)Luxembourg City

New DelhiSão Paulo

DubaiLondon City

Paris Ile-de-FranceMumbai

Tokyo (Inner Central)Hong Kong (Central)

London West End

The cost of prime office space in Australia (using an average of all major cities) is among the most competitively priced in the world and compares favourably to other major regional and global financial services centres. The average cost of prime office space in Sydney is around 65 per cent lower than that of Hong Kong and Tokyo. Melbourne and Brisbane have even more competitively priced office costs, coming in at around 75 per cent less than rental costs in Hong Kong and Tokyo.

Section 4. Advanced Infrastructure 47

Page 50: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia’s Businesses with Internet Access and Broadband as Main Type of Internet Connection1 – 2008-09

1. Estimated number of businesses in Australia was 713,000 in financial year 2008-09 (released 24 June, 2010); Austrade

Sources: Australian Bureau of Statistics, cat. no. 8166.0 Summary of IT Use and Innovation in Australian Business, 2008–09; Austrade

Industry Average: 98.1

95.6

95.8

96.0

97.0

98.5

98.7

99.2

100.0

100.0

98.0

97.9

97.9

97.8

97.5

97.2

97.2

Financial/Insurance Services

Construction

Information Media/Telecommunications

Mining

Wholesale Trade

Other Services

Health Care/Social Assistance

Retail Trade

Professional, Scientific/Technical Services

Accommodation/Food Services

Rental, Hiring/Real Estate Services

Manufacturing

Transport, Postal/Warehousing

Electricity, Gas, Water/Waste Services

Arts/Recreation Services

Administrative/Support Services

Business with Internet access (%)

93 94 95 96 97 98 99 100

Australian finance companies are sophisticated users of ICT, which is driving productivity across the industry. Australian banks and finance firms continue to invest heavily in new technologies and applications, with 100 per cent of businesses having internet access and broadband as the main type of internet connection. Other sectors are also converting on this blanket level of coverage.

Section 4. Advanced Infrastructure 48

Page 51: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Asia-Pacific Financial Services ICT Spending (US$ Million)

CAGR = Compound Annual Growth Rate.

Sources: World Information Technology and Services Alliance, Digital Planet 2008; Austrade

Market Share CAGR % 2003 2004 2005 2006 2007 2008 2009 2010 2010 % Since 2003

Japan 22,350 25,232 24,620 26,175 25,986 27,597 28,827 30,006 41.4 4.3

China 6,191 8,834 10,211 12,408 14,197 16,651 18,965 20,990 28.9 19.1

Australia 3,754 4,434 4,576 4,934 5,298 5,574 5,795 6,035 8.3 7.0

South Korea 2,924 3,172 3,381 3,701 3,798 3,885 3,957 4,079 5.6 4.9

India 1,505 1,822 1,990 2,281 2,652 2,990 3,278 3,605 5.0 13.3

Taiwan 1,346 1,500 1,500 1,563 1,603 1,681 1,780 1,912 2.6 5.1

Singapore 912 1,022 1,042 1,154 1,200 1,268 1,322 1,386 1.9 6.2

Hong Kong 947 1,039 1,057 1,155 1,180 1,231 1,289 1,361 1.9 5.3

New Zealand 425 483 496 527 566 595 618 647 0.9 6.2

Malaysia 286 331 341 384 429 461 493 524 0.7 9.0

Thailand 219 273 301 359 399 431 464 501 0.7 12.5

Philippines 185 248 277 345 394 437 464 497 0.7 15.2

Indonesia 145 172 190 238 268 293 320 348 0.5 13.3

Vietnam 168 194 214 234 258 288 315 338 0.5 10.4

Pakistan 94 108 114 131 139 147 155 163 0.2 8.1

Bangladesh 53 59 62 65 71 78 85 92 0.1 8.2

Sri Lanka 37 45 48 59 63 68 73 79 0.1 11.5

Asia-Pacific 41,544 48,968 50,418 55,713 58,501 63,675 68,199 72,565 100.0 8.3

Australia’s financial services total ICT spending is the third largest in the Asia-Pacific region after Japan and China. Australia’s financial organisations continue to invest heavily in new technologies and applications. Total ICT spending is projected to exceed US$6 billion in 2010, with a regional market share of more than eight per cent.

Section 4. Advanced Infrastructure 49

Page 52: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Economist Intelligence Unit Digital Economy Rankings – 20101

1. The digital economy rankings model consists of over 100 separate quantitative and qualitative criteria, all but one of which are scored by the EIU’s regional analysts and editors, and organised into six primary categories. The 39 indicators and 82 sub-indicators are, in turn, weighted according to their assumed importance as influencing factors.

Sources: Economist Intelligence Unit (EIU), Digital Economy Rankings 2010, Beyond E-readiness, Appendix 2: Category Scores (released June 2010); Austrade

Social and Government Consumer Ranking Overall Business Cultural Legal Policy and and Business(Out of 70) Score Connectivity Environment Environment Environment Vision Adoption

Category Weight 20% 15% 15% 10% 15% 25%1 Sweden 8.49 8.20 8.13 8.53 8.25 8.90 8.752 Denmark 8.41 7.85 8.18 8.47 8.10 8.70 8.903 USA 8.41 7.35 7.85 9.00 8.70 9.25 8.604 Finland 8.36 8.00 8.30 8.47 8.35 8.00 8.855 Netherlands 8.36 8.05 8.05 8.07 8.45 8.25 9.006 Norway 8.24 7.95 7.95 8.00 8.30 8.05 8.907 Hong Kong 8.22 7.65 8.40 7.27 9.00 9.18 8.288 Singapore 8.22 7.35 8.63 7.33 8.70 9.13 8.489 Australia 8.21 7.35 8.24 8.53 8.50 8.85 8.1810 New Zealand 8.07 6.80 8.17 8.60 8.45 8.50 8.2911 Canada 8.05 7.15 8.33 7.87 7.95 8.75 8.3512 Taiwan 7.99 7.00 7.95 8.40 8.15 8.55 8.1513 South Korea 7.94 7.90 7.32 8.80 7.65 9.20 7.1814 UK 7.89 7.65 7.40 7.73 8.10 8.55 8.0016 Japan 7.85 7.70 7.16 7.80 7.43 8.75 8.0418 Germany 7.80 7.60 7.82 8.00 8.05 7.40 7.9820 France 7.67 6.80 7.54 7.60 7.85 8.20 8.1027 Italy 6.92 6.45 6.32 7.60 8.45 6.55 6.8832 UAE 6.25 6.80 7.27 5.47 5.10 6.20 6.1836 Malaysia 5.93 4.35 7.36 5.47 6.88 6.65 5.8049 Thailand 4.86 3.20 6.83 4.50 6.35 5.60 4.1854 Philippines 4.47 2.60 6.35 4.27 4.85 5.20 4.3856 China 4.28 2.65 6.36 5.40 5.20 4.60 3.1158 India 4.11 2.15 6.27 4.67 5.60 5.10 2.8865 Indonesia 3.60 2.60 6.04 3.60 4.20 3.88 2.55

Australia is one of the world’s most tech-savvy countries, with one of the fastest take-ups of new technology. Australia was ranked one of the top ten in the world in the Economist Intelligence Unit’s Digital Economy Rankings 2010. Australia is a sophisticated market where ICT companies can successfully develop solutions with global applicability. The country is also the source of a number of distinctive technologies – especially in the areas of e-finance, e-health, and e-government.

Section 4. Advanced Infrastructure 50

Page 53: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

United Nations e-Government Survey 2010 – e-Participation Index

Sources: United Nations e-Government Survey 2010: Leveraging e-Government at a Time of Financial and Economic Crisis, Statistical Annex Page 124; Austrade

Rank

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Country Index Value

South Korea 1.000

Australia 0.914

Spain 0.829

New Zealand 0.771

UK 0.771

Japan 0.757

USA 0.757

Canada 0.729

Estonia 0.686

Singapore 0.686

Bahrain 0.671

Malaysia 0.657

Denmark 0.643

Germany 0.614

France 0.600

Netherlands 0.600

Belgium 0.586

Kazakhstan 0.557

Lithuania 0.529

Slovenia 0.514

Austria 0.500

Norway 0.500

Cyprus 0.486

Sweden 0.486

Croatia 0.457

Rank Country Index Value

26 Colombia 0.443

26 Ireland 0.443

28 Kyrgyzstan 0.429

28 Mongolia 0.429

30 Finland 0.414

30 Israel 0.414

32 China 0.371

32 Mexico 0.371

34 Chile 0.343

34 Malta 0.343

36 Guatemala 0.314

36 Hungary 0.314

36 Uzbekistan 0.314

39 Bulgaria 0.300

39 Nicaragua 0.300

39 Tunisia 0.300

42 Brazil 0.286

42 Egypt 0.286

42 Jordan 0.286

45 Latvia 0.271

45 Lebanon 0.271

45 Portugal 0.271

48 Greece 0.257

48 Ukraine 0.257

48 Uruguay 0.257

Rank Country Index Value

51 Belarus 0.243

51 Poland 0.243

53 Kenya 0.229

53 Kuwait 0.229

55 Italy 0.214

55 Macedonia 0.214

55 Turkey 0.214

58 Argentina 0.200

58 Bolivia 0.200

58 Costa Rica 0.200

58 India 0.200

58 Rep. of Moldova 0.200

58 Switzerland 0.200

64 Dominican Republic 0.186

64 Philippines 0.186

64 Romania 0.186

64 South Africa 0.186

68 Azerbaijan 0.171

68 Brunei Darussalam 0.171

68 Cape Verde 0.171

68 Côte d’Ivoire 0.171

68 Libya 0.171

68 Luxembourg 0.171

68 Pakistan 0.171

68 Peru 0.171

Rank Country Index Value

76 Antigua & Barbuda 0.157

76 Cameroon 0.157

76 Congo 0.157

76 Ecuador 0.157

76 Montenegro 0.157

76 Oman 0.157

82 Andorra 0.143

82 Grenada 0.143

82 Sri Lanka 0.143

82 Venezuela 0.143

86 Albania 0.129

86 Czech Republic 0.129

86 Honduras 0.129

86 Indonesia 0.129

86 Lao 0.129

86 Liechtenstein 0.129

86 Morocco 0.129

86 Qatar 0.129

86 Russia 0.129

86 Trinidad & Tobago 0.129

86 UAE 0.129

97 Cambodia 0.114

97 Cuba 0.114

97 Mali 0.114

97 Mauritania 0.114

Australia ranks the second highest out of 179 countries in the e-Government Participation Index. The United Nations 2010 Survey found that citizens now benefit from more advanced e-service delivery, better access to information, more efficient government management and improved interactions with governments, primarily as a result of increasing use by the public sector of information and communications technology.

Section 4. Advanced Infrastructure 51

Page 54: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia is one of the most politically stable countries in the world and provides a regulatory climate that strongly supports institutional growth.

Stable Environment

SECTION 5

Stable EnvironmentRisk of Political Instability 53

Index of Economic Freedom World Ranking 54

Business Environment 55

Global Real Estate Transparency Index 56

Key Indicators of Doing Business 57

Australia’s Financial Regulatory Framework 58

Page 55: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Risk of Political Instability1 The higher the score the better

Survey question: The risk of political instability is very low.

1. IMD WCY Executive Opinion Survey based on an index from 0 to 10. The IMD included 58 economies in the 2010 survey.

Sources: IMD World Competitiveness Online 1995-2010 (Updated: May 2010); Austrade

Rank

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

2006 Score

Finland 9.71

Australia 9.68

Denmark 9.51

Switzerland 9.44

Ireland 9.42

Canada 9.32

Luxembourg 9.30

Austria 9.25

Singapore 9.22

Iceland 9.19

France 9.11

Chile 9.07

New Zealand 8.91

Sweden 8.88

USA 8.87

Norway 8.83

Germany 8.72

Netherlands 8.63

UK 8.54

Malaysia 8.40

2007 Score

Austria 9.71

Ireland 9.57

Luxembourg 9.55

Australia 9.47

Denmark 9.44

Switzerland 9.30

New Zealand 9.30

Sweden 9.18

Finland 9.11

Singapore 9.08

Netherlands 8.95

Germany 8.84

Norway 8.82

Canada 8.80

Iceland 8.72

Chile 8.69

UK 8.67

USA 8.56

Portugal 8.52

Greece 8.52

2008 Score

Luxembourg 9.64

Switzerland 9.62

Singapore 9.40

Australia 9.38

Sweden 9.23

Austria 9.20

Canada 9.09

New Zealand 8.84

Iceland 8.83

Ireland 8.82

Denmark 8.81

Netherlands 8.71

Norway 8.63

USA 8.54

Germany 8.48

Finland 8.48

UK 8.34

Portugal 8.24

France 8.21

Hong Kong 8.16

2009 Score

Finland 9.90

Australia 9.54

Denmark 9.49

Switzerland 9.33

New Zealand 9.27

Sweden 9.21

Norway 9.07

Luxembourg 9.02

Austria 8.98

Chile 8.80

Singapore 8.64

Netherlands 8.57

Canada 8.42

Germany 8.33

USA 8.05

Hong Kong 7.71

Brazil 7.69

France 7.63

China 7.62

Ireland 7.60

2010 Score

Norway 9.36

Luxembourg 9.25

Australia 9.24

Finland 9.20

Denmark 9.11

Austria 9.00

Switzerland 8.93

Canada 8.90

Chile 8.86

Singapore 8.78

Sweden 8.77

New Zealand 8.76

Qatar 8.68

Germany 8.49

France 8.46

USA 8.16

Ireland 8.09

Netherlands 7.82

Hong Kong 7.49

UK 7.41

Australia was ranked one of the most politically stable countries in the world in 2010 and is the only country that has consistently ranked in the top five since 1999.

Section 5. Stable Environment 53

Page 56: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Index of Economic Freedom World Ranking1 – 2009The higher the score the better the rating

1. The 2010 Index of Economic Freedom covers 183 countries and measures 10 separate components of economic freedom (Business Freedom, Trade Freedom, Fiscal Freedom, Government Spending, Monetary Freedom, Investment Freedom, Financial Freedom, Property Rights, Freedom from Corruption and Labour Freedom). The 2010 Index is based primarily on data covering the period from July 2008 through June 2009. The number in brackets in the chart refers to the country’s world ranking.

Sources: The Heritage Foundation and Dow Jones & Company, Inc., Washington D.C., 2010 Index of Economic Freedom; Austrade

0 10 20 30 40 50 60 70 80 90 100

89.7

86.182.6

82.181.3

81.1

80.478.077.9

77.276.5

75.4

75.0

72.971.1

70.469.9

69.667.3

64.864.2

64.162.7

55.6

55.553.8

51.049.8

Hong Kong (1)Singapore (2)Australia (3)

New Zealand (4)Ireland (5)

Switzerland (6)Canada (7)

USA (8)Denmark (9)

Chile (10)UK (11)

Luxembourg (14)Netherlands (15)

Japan (19)Germany (23)

Taiwan (27)South Korea (31)

Spain (36)UAE (46)

Malaysia (59)France (64)

Thailand (66)Italy (74)

Brazil (113)Indonesia (114)

India (124)China (140)

Vietnam (144)

Other KeyEconomies

Top 10Ranking

Australia ranked third in the world for Economic Freedom, with a score of 82.6. The country’s overall score is well above the weighted averages of the Asia-Pacific region (53.8) and the world (56.7). The Wall Street Journal and The Heritage Foundation have stressed that Australia’s sound economic framework and well-implemented structural reforms have allowed the country to weather the Global Financial Crisis better than many other advanced economies. Underpinned by robust financial regulation, Australia’s banks have coped well with the financial turmoil. Monetary stability and openness to international business continue to facilitate a competitive investment environment based on market principles. A strong rule of law protects property rights, and corruption is perceived as minimal. Both foreign and domestically owned companies enjoy considerable flexibility under licensing and regulatory schemes.

Section 5. Stable Environment 54

Page 57: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Business Environment

1. IMD sourced the data from Euromoney country credit-worthiness.

2. The Corruption Perceptions Index (CPI) measures the perceived level of public-sector corruption in 180 countries and territories around the world. The CPI is a “survey of surveys”, based on 13 different expert and business surveys.

Sources: (a) Institute for Management Development (IMD), Switzerland, World Competitiveness Yearbook 2010 (58 economies); (b) World Economic Forum, Switzerland and Harvard University, Global Competitiveness Report 2009-10 (133 economies); (c) Transparency International Corruption Perceptions Index 2009 (180 economies); Austrade

Australia China Hong Kong Japan India Singapore USA UK

World Competitiveness Yearbook 2010 Rankinga in:

Ethical Practices 3 32 25 12 35 8 15 17

Risk Factors in the Financial System 4 43 15 25 10 2 50 55

Protectionism 7 46 11 31 32 13 39 30

Competition Legislation 7 34 29 12 39 10 24 27

Financial Institutions’ Transparency 7 56 17 23 11 2 49 47

Investment Risk1 9 35 21 18 54 19 12 15

Global Competitiveness Report 2009-10 Rankingb in:

Soundness of Bank 3 66 5 84 25 8 108 126

Efficacy of Corporate Board 5 92 52 24 63 8 20 23

Judicial Independence 5 62 14 23 37 19 26 16

Regulation of Securities Exchanges 6 91 16 40 11 4 47 46

Effectiveness of Anti-Monopoly Policy 7 50 84 13 25 8 11 17

Reliance on Professional Management 7 46 38 19 30 8 11 13

Transparency International 2009 World RankingC in:

Corruption Perception Index2 8 79 12 =17 84 3 19 =17

Australia is one of the oldest and most stable democracies in the world and its political and legal institutions are recognised globally for their transparency, impartiality and robustness. The country provides a safe and secure environment for global financial services firms and multinational companies looking to invest and establish operations.

Section 5. Stable Environment 55

Page 58: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Global Real Estate Transparency Index – 20101

1. Jones Lang LaSalle’s Global Real Estate Transparency Index quantifies real estate market transparency across 81 markets worldwide. The Index is updated every two years and has been charting the steady progress in real estate transparency across the globe since 1999. The survey measures a country’s transparency based on five criteria: performance measurement, market fundamentals, listed vehicles, regulatory and legal issues and transaction processes.

Sources: Jones Lang LaSalle, Real Estate Transparency Index Global Foresight Series 2010, Mapping the World of Transparency, Chart 5: Composite Index; Austrade

Hig

hTr

ansp

aren

t

Rank Market Score

1 Australia 1.22

2 Canada 1.23

3 UK 1.24

4 New Zealand 1.25

4 Sweden 1.25

6 USA 1.25

7 Ireland 1.27

8 France 1.28

9 Netherlands 1.38

10 Germany 1.38

14 Spain 1.58

15 Austria 1.71

16 Singapore 1.73

17 Norway 1.75

18 Hong Kong 1.76

19 Portugal 1.82

20 Switzerland 1.87

21 Italy 1.89

23 South Africa 2.09

25 Malaysia 2.30

26 Japan 2.30

Sem

i

Rank Market Score

29 Greece 2.60

30 Slovakia 2.61

31 Russia Tier 1 Cities 2.64

32 Romania 2.68

33 Taiwan 2.71

34 Chile 2.72

36 Turkey 2.90

37 UAE – Dubai 2.93

38 Brazil 2.95

39 Thailand 3.02

40 Bulgaria 3.03

41 India Tier 1 Cities 3.11

42 South Korea 3.11

45 China Tier 1 Cities 3.14

46 Mexico 3.14

48 Philippines 3.15

50 Bahrain 3.28

51 Argentina 3.30

56 UAE – Abu Dhabi 3.45

57 Indonesia 3.46

58 Jordon 3.46Lo

w

Rank Market Score

59 Oman 3.50

60 Morocco 3.58

61 Croatia 3.59

62 Egypt 3.62

63 Saudi Arabia 3.66

64 Qatar 3.70

66 Lebanon 3.78

67 Panama 3.85

68 Kuwait 3.90

70 Kazakhstan 3.93

71 Colombia 3.96

72 Peru 4.00

73 Pakistan 4.18

74 Venezuela 4.18

75 Tunisia 4.24

76 Vietnam 4.25

77 Dominican Republic 4.28

78 Belarus 4.48

79 Syria 4.65

80 Sudan 4.68

81 Algeria 4.74Opa

que

Australia’s property market is the most transparent in the world, with investors given comprehensive and regular access to data regarding rents, prices and valuations, the Jones Lang LaSalle 2010 Global Transparency Index has reported. Rising levels of transparency are associated with rising levels of foreign direct investment, the report notes – a powerful incentive for encouraging the free flow of information and the fair and consistent application of local property laws. The report also suggests those markets recording better transparency rates will record greater growth and recovery than closed-off markets.

Section 5. Stable Environment 56

Page 59: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Key Indicators of Doing Business – 2010

1. Time is recorded in calendar years. 2. The recovery rate is recorded as cents on the dollar recovered by claimants – creditors, tax authorities and employees – through bankruptcy proceedings. 3. Each index assigns values between 0 and 100, with higher values representing more rigid labour regulations. 4. The redundancy cost indicator measures the cost of advance notice requirements, severance payments and penalties due when terminating a redundant worker.

Sources: World Bank Group, Doing Business 2010; Austrade

STARTING A BUSINESS Procedures Duration (number) (days)

1 1 1 5 2 2 3 3 3 6 5 7 6 6 6 10 6 10 6 13 6 20 6 23 7 32 8 14 8 15 8 23 9 11 9 18 9 60 10 47 11 50 13 30 14 38 15 52 16 120

CLOSING A BUSINESS Time1 Recovery Rate2 (years) (cents in dollar)

1.3 76.2 0.8 88.7 1.0 78.8 0.8 91.3 1.1 79.8 1.9 44.7 1.5 76.7 1.1 82.7 1.8 56.6 1.0 84.2 3.0 46.8 1.9 80.9 2.7 42.4 1.5 80.5 5.1 10.2 0.6 92.5 2.3 38.6 1.2 52.2 5.5 13.7 1.0 73.2 5.0 18.0 7.0 15.1 1.7 35.3 5.7 4.4 4.0 17.1

ENFORCING CONTRACTS Procedures Time (number) (days)

30 216 36 570 28 395 21 150 24 280 29 331 32 300 25 514 40 1,210 30 399 31 417 47 510 35 479 35 230 49 537 30 360 30 585 30 394 39 570 39 515 34 295 46 1,420 34 406 37 842 45 616

Economy

New ZealandCanadaAustraliaSingaporeHong KongFranceUSANetherlandsItalyUKSwitzerlandTaiwanThailandSouth KoreaUAEJapanMalaysiaGermanyIndonesiaSpainVietnamIndiaChinaPhilippinesBrazil

EMPLOYING WORKERS Difficulty of Difficulty of Firing Costs4

Hiring Index Firing Index (weeks of (0-100)3 (0-100)3 salary)

11 10 0 11 0 28 0 0 4 0 0 4 0 0 10 67 30 32 0 0 0 17 70 17 33 40 11 11 0 22 0 0 13 78 40 91 33 0 54 44 30 91 0 0 84 11 30 4 0 30 75 33 40 69 61 60 108 78 30 56 11 40 87 0 70 56 11 50 91 56 30 91 78 0 46

Australia has been ranked as one of the most business-friendly economies in the world, offering a business environment that is both stable and flexible. The country has a robust regulatory framework that offers security and integrity, while promoting efficiency through the avoidance of time consuming business processes.

Section 5. Stable Environment 57

Page 60: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Note: Membership of the Council of Financial Regulators also includes the Commonwealth Treasury.

Source: KPMG 1998 Financial Institutions Performance Survey

TREASURER

Reserve Bankof Australia

(RBA)

Australian PrudentialRegulation Authority

(APRA)

Australian Securities andInvestments Commission

(ASIC)

■ Monetary Policy■ Systemic stability■ Payments systems regulation

■ Prudential regulation of: – Deposit-taking institutions – Life and general insurance – Superannuation funds

■ Market integrity■ Consumer protection■ Corporations

COUNCIL OF FINANCIAL REGULATORS

PaymentSystems Board

Australia’s Financial Regulatory Framework

Australia’s financial regulatory environment is viewed as a model by many other jurisdictions around the world. Reforms in recent years have led to a system that is both best practice in its approach and pro-business in its outlook. Supervision of the financial sector is organised along functional rather than institutional lines, with oversight by statutory bodies with operational independence from the government.

Section 5. Stable Environment 58

Page 61: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Australia’s highly desirable quality of life provides a strong drawcard for skilled professionals and global companies looking to establish regional headquarters.

Worldwide Quality of Life Index 60

Worldwide Cost of Living Index 61

Human Development Index 62

Growth in GDP Per Capita 63

Health and Environment – Pollution Problems 64

SECTION 6

High Quality of Life

High Quality of Life

Page 62: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Worldwide Quality of Life Index1 The higher the score the better

Survey question: Quality of life is high.

1. IMD WCY Executive Opinion Survey based on an index from 0 to 10. The IMD included 58 economies in the 2010 survey.

Sources: IMD World Competitiveness Online 1995-2010 (Updated: May 2010); Austrade

Rank

12345678910111213141516171819202122232425

2006 Score

Austria 9.58Iceland 9.41Switzerland 9.41Denmark 9.36Norway 9.34Australia 9.22Canada 9.15Luxembourg 8.89Belgium 8.83Germany 8.73Finland 8.73New Zealand 8.71Sweden 8.58Netherlands 8.42Ireland 8.32Singapore 8.30USA 8.29France 8.20Hong Kong 7.52Spain 7.47Malaysia 7.41UK 7.14Qatar 7.13Czech Republic 7.06Chile 7.04

2007 Score

Austria 9.71Iceland 9.56Switzerland 9.45Norway 9.25Australia 9.24Luxembourg 9.21New Zealand 9.10Denmark 9.08Canada 8.96Singapore 8.96Netherlands 8.74Sweden 8.65Germany 8.54Finland 8.49Belgium 8.47Ireland 8.00USA 7.90Spain 7.85France 7.73Czech Republic 7.31Israel 7.21Malaysia 7.06Chile 7.03Italy 6.97UK 6.95

2008 Score

Iceland 9.72Switzerland 9.71Austria 9.64Australia 9.28Canada 9.27Luxembourg 9.21Norway 9.16Sweden 9.08Denmark 8.98Netherlands 8.91New Zealand 8.91Germany 8.89Singapore 8.89Belgium 8.71USA 8.53Ireland 8.39France 8.17Finland 8.12Spain 7.71Czech Republic 7.59Malaysia 7.43UK 7.16Israel 6.91Japan 6.90Italy 6.86

2009 Score

Switzerland 9.70Austria 9.57Norway 9.56Denmark 9.36Canada 9.21Australia 9.20Sweden 9.20Luxembourg 9.13Finland 9.07Germany 9.05Netherlands 8.94New Zealand 8.88Belgium 8.79Singapore 8.45France 8.26USA 8.18Qatar 8.13Ireland 8.05Spain 7.69UK 7.68Malaysia 7.52Czech Republic 7.32Israel 7.24Japan 7.05Slovenia 6.92

2010 Score

Austria 9.81Norway 9.59Switzerland 9.52Australia 9.26Luxembourg 9.24Denmark 9.16Canada 9.15Netherlands 9.10Sweden 8.89Germany 8.78Belgium 8.78New Zealand 8.78France 8.77Iceland 8.61Finland 8.46Singapore 8.23Malaysia 7.98USA 7.94Ireland 7.73Qatar 7.73Spain 7.50UK 7.37Czech Republic 7.33Israel 7.13Japan 6.94

Australia’s political and economic advantages are complemented by a welcoming attitude and excellent quality of life. In 2010, Australia’s quality of life was ranked fourth in the world. With one of the highest standards of living in the world, Australia offers a relatively unspoilt environment, and enviable climate. Australian cities are regularly judged to be among the most liveable in the world by a range of international surveys. In the Economist Intelligence Unit Liveability Ranking 2010, four of Australia’s mainland capital cities were ranked in the top ten liveable cities in the world. In Mercer Human Resource Consulting’s Quality of Living Survey 2010, Sydney, Melbourne and Perth were ranked among the top 25 cities in the world in which to live.

Section 6. High Quality of Life 60

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Worldwide Cost of Living Index

1. Rank is based on the cost of living index 2. Index of a basket of goods and services in major cities, including housing (New York City = 100) 3. Rents are based on unfurnished apartments built after 1980, with an average comfort customary in the locality and near the city centre.

Sources: IMD World Competitiveness Online 1995-2010 (Updated: May 2010); Austrade

Premium Fixed Unleaded Broadband Gasoline (Residential) Cost of 3-Room (95 Ron) Tariffs Living Apartment Prices Monthly Rank1 Index2 Monthly Rent3 per litre Fee

1 Japan 131.5 1,791 NA 37.42 Hong Kong 108.7 4,066 1.81 12.83 Switzerland 107.2 1,778 1.39 32.74 Denmark 105.0 1,817 1.78 29.15 Russia 98.4 2,079 0.64 13.36 Singapore 98.0 2,942 1.14 16.77 Norway 94.2 1,870 1.89 51.08 Italy 94.1 1,706 2.02 28.89 Venezuela 93.3 2,079 0.05 31.310 Israel 91.9 1,438 1.51 6.711 Finland 90.5 1,556 1.78 39.012 Austria 89.3 1,268 1.45 36.113 China 88.4 994 0.49 17.614 Ireland 87.4 2,157 1.53 36.415 Greece 85.9 837 1.40 23.916 France 85.9 1,772 1.68 36.117 Netherlands 85.7 1,477 1.87 36.218 Slovak Republic 84.8 889 1.55 28.619 Spain 82.2 1,536 1.39 28.820 Luxembourg 82.1 1,190 1.44 42.021 Belgium 81.6 2,288 1.83 29.022 Kazakhstan 81.5 848 0.68 12.823 South Korea 80.6 2,602 1.40 25.324 Jordan 79.8 NA 0.86 30.425 Turkey 79.7 1,504 2.02 18.226 Germany 78.2 1,325 2.05 43.4

Premium Fixed Unleaded Broadband Gasoline (Residential) Cost of 3-Room (95 Ron) Tariffs Living Apartment Prices Monthly Rank1 Index2 Monthly Rent3 per litre Fee

27 Croatia 77.5 900 1.44 20.728 Taiwan 77.0 1,307 0.82 11.229 Portugal 76.3 1,085 1.72 29.030 USA 75.7 3,122 0.65 20.031 Czech Republic 74.6 928 1.43 43.332 Brazil 74.1 1,039 NA 28.033 Estonia 73.8 523 1.28 27.834 UK 73.5 2,144 1.55 23.835 Sweden 72.3 1,477 1.59 35.536 Ukraine 71.9 758 NA 7.237 Lithuania 71.7 628 1.42 15.238 Slovenia 70.5 1,281 1.46 21.739 Malaysia 69.2 327 0.50 19.040 Canada 68.7 1,477 0.91 24.841 Thailand 68.6 549 1.09 18.842 Bulgaria 68.1 771 1.22 14.843 Australia 67.4 1,229 1.08 26.044 India 67.0 595 NA 5.245 Indonesia 66.9 954 0.59 20.846 Romania 66.5 928 1.20 7.247 Hungary 66.4 1,190 1.41 30.348 Argentina 65.7 497 0.97 31.249 Poland 65.6 981 1.32 13.750 Colombia 65.0 994 1.28 34.851 Peru 64.6 405 1.53 36.552 Philippines 63.8 575 0.98 21.5

(US$, 2009) (US$, 2009)

When issues of cost and quality of life are considered together, Australia stands out as one of the world most desirable places for expatriates and their families to live and work.

Section 6. High Quality of Life 61

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Human Development Index (HDI)

Sources: The United Nations Development Programme, Human Development Report 2009, HDR 2009 Statistical Tables, Table G: Human Development Index Trends; Austrade

Rank

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

Country Index

Norway 0.971

Australia 0.970

Iceland 0.969

Canada 0.966

Ireland 0.965

Netherlands 0.964

Sweden 0.963

France 0.961

Switzerland 0.960

Japan 0.960

Luxembourg 0.960

Finland 0.959

USA 0.956

Austria 0.955

Spain 0.955

Denmark 0.955

Belgium 0.953

Italy 0.951

Liechtenstein 0.951

New Zealand 0.950

Rank Country Index

21 UK 0.947

22 Germany 0.947

23 Singapore 0.944

24 Hong Kong 0.944

25 Greece 0.942

26 South Korea 0.937

27 Israel 0.935

28 Andorra 0.934

29 Slovenia 0.929

30 Brunei 0.920

31 Kuwait 0.916

32 Cyprus 0.914

33 Qatar 0.910

34 Portugal 0.909

35 UAE 0.903

36 Czech Republic 0.903

37 Barbados 0.903

38 Malta 0.902

39 Bahrain 0.895

40 Estonia 0.883

Rank Country Index

41 Poland 0.880

43 Hungary 0.879

44 Chile 0.878

53 Mexico 0.854

61 Bulgaria 0.840

66 Malaysia 0.829

71 Russia 0.817

75 Brazil 0.813

78 Peru 0.806

79 Turkey 0.806

87 Thailand 0.783

92 China 0.772

102 Sri Lanka 0.759

105 Philippines 0.751

116 Vietnam 0.725

129 South Africa 0.683

134 India 0.612

137 Cambodia 0.593

138 Myanmar 0.586

141 Pakistan 0.572

Top 40 HDI Rankings Other HDI Rankings

Australia has the second best quality of life in the world, according to the United Nations Development Program’s Human Development Report 2009. This Index is a comparative measure of life expectancy, literacy, education and standards of living across 182 countries. The superior ranking of Australia in the HDI, combined with the country’s mild climate, low pollution levels, easy access to healthcare and relatively low cost of living, is a powerful drawcard for skilled professionals and their families.

Section 6. High Quality of Life 62

Page 65: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Growth in GDP Per Capita (Current Price, US$) – 2000 to 2010

Note: The number in brackets refers to the country’s world ranking for US$ growth in nominal GDP per capita (out of 183 economies) since 2000.

Sources: International Monetary Fund, World Economic Outlook Database, April 2010; Austrade

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

GDP per Capita US$ Growth since 2000GDP per Capita in 2000

US

$ B

illio

n

Luxe

mbour

g (1

)

Norw

ay (

3)

Qat

ar (

2)

Sw

itzer

land

(4)

Den

mar

k (6

)

Aus

tral

ia (

5)

UA

E (7)

Irel

and (1

0)

Net

herlan

ds

(8)

US

A (

27)

Aus

tria

(9)

Can

ada

(11)

Fran

ce (1

6)

Japan

(62)

Ger

man

y (1

7)

Sin

gapore

(20)

UK

(31

)

Ital

y (2

2)

Hong

Kong

(50)

New

Zea

land

(19)

Spai

n (2

1)

Gre

ece

(18)

Sout

h K

ore

a (3

9)

Taiw

an (73

)

Bra

zil (

51)

Mal

aysi

a (7

2)

Thai

land

(8

9)

Chi

na (76

)

Indone

sia

(97)

Phi

lippin

es (1

23)

India

(134)

Australia’s impressive rise in income per capita reflects the wealth creation that has flowed from nearly two decades of uninterrupted economic growth. Continued improvement in the country’s high standard of living, and its enviable quality of life, make Australia one of the most attractive locations in the Asia-Pacific region.

Section 6. High Quality of Life 63

Page 66: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

Health and Environment – Pollution Problems – 2010The higher the score the better

Survey question: Pollution problems do not seriously affect your economy.

1. IMD WCY Executive Opinion Survey based on an index from 0 to 10. The IMD included 58 economies in the 2010 survey.

Sources: IMD World Competitiveness Online 1995-2010 (Updated: May 2010); Austrade

Rank

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

Country Score

Iceland 9.12

Austria 8.62

Finland 8.51

Sweden 8.07

Denmark 8.03

Switzerland 8.02

Ireland 7.87

Singapore 7.80

Norway 7.67

Germany 7.61

Australia 7.42

New Zealand 7.39

Luxembourg 7.06

Netherlands 6.83

Japan 6.77

Canada 6.74

Malaysia 6.69

UK 6.67

Israel 6.64

France 6.52

Rank Country Score

21 Hungary 6.49

22 Portugal 6.20

23 Spain 6.16

24 USA 6.02

25 Estonia 5.93

26 Belgium 5.82

27 Czech Republic 5.76

28 Lithuania 5.76

29 Taiwan 5.61

30 Greece 5.55

31 Qatar 5.53

32 Croatia 5.51

33 Turkey 5.51

34 Jordan 5.48

35 Slovak Republic 5.46

36 Ukraine 5.15

37 South Korea 5.12

38 Argentina 5.02

39 Chile 4.91

40 Poland 4.90

Rank Country Score

41 Thailand 4.80

42 Kazakhstan 4.78

43 Slovenia 4.73

44 Italy 4.71

45 Russia 4.69

46 South Africa 4.57

47 Bulgaria 4.44

48 Brazil 4.35

49 India 4.19

50 Venezuela 4.17

51 Indonesia 4.15

52 Romania 3.82

53 Hong Kong 3.67

54 Mexico 3.65

55 Philippines 3.60

56 Colombia 3.34

57 Peru 2.97

58 China 2.86

Australia’s ranking in Pollution Problems confirms Australia’s desirability as one of the world’s most attractive locations. Australia does not suffer the same degree of pollution problems as those experienced in much of the rest of the world.

Section 6. High Quality of Life 64

Page 67: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

About the Australian Trade CommissionThe Australian Trade Commission – Austrade – is the Australian Government’s trade and investment development agency.

Through Austrade’s global network of more than 100 locations in over 55 countries, we assist Australian companies to succeed in international business and attract productive foreign direct investment into Australia.

Austrade is the fi rst point-of-contact for all investment inquiries. Working in partnership with business and government, Austrade can provide your company with the information needed to establish or expand a business in Australia.

Austrade can also help by connecting you with the right industry and government contacts as well as providing information on investment regulations and government assistance programs.

For more information visit www.austrade.gov.au/invest orcall 13 28 78 within Australia or +61 2 9392 2035 from outside Australia.

Page 68: ALPHA Fund   Australias Economic Strengths   January 2011   Austrade Presentation

10-11-27