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Implications for Australia of Firms Locating Offshore

Industry Commission inquiry report

This report was signed on 28 August 1996. The report contains the findings of the inquiry into the key factors affecting the decisions of firms to locate offshore, in particular that the Commission report on any institutional, regulatory or other arrangements subject to influence by government in Australia or overseas, which lead to inefficiencies in location decisions and advise on courses of action to remove or reduce those inefficiencies.

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    Contents

    Preliminaries
    Cover, Copyright, Signing Page, Contents, Main Abbreviations, Terms of Reference, Summary, Findings and Recommendations

    1   Introduction

    2   Australian Direct Investment Abroad
    2.1   Data deficiencies
    2.2   Trends in ADIA
    2.3   Significance of ADIA
    2.4   Charateristics of ADIA

    3   Reasons Why Firms Invest Offshore
    3.1   Introduction
    3.2   What makes offshore operations competitive?
    3.3   Alternative means of supplying overseas markets
    3.4   Influences on firms' decisions to locate offshore
    3.5   Conclusions

    4   Economic Effects of Firms Locating Offshore
    4.1   Issues and obstacles in assessing the effects of ADIA
    4.2   Effects of ADIA on trade
    4.3   Effects of ADIA on total investment
    4.4   Effects of ADIA on employment levels, wages and employment composition
    4.5   Effects of ADIA on production, including spin-off benifits
    4.6   Effects of ADIA on taxation and the treatment of repatriated profits
    4.7   Effects of ADIA on national income
    4.8   Effects of ADIA in the presence of policy distortions

    5   Taxation of International Income
    5.1   Introduction
    5.2   Taxation efficiency benchmarks
    5.3   Australia's international taxation system
    5.4   Is the system appropriate?
    Addendum:   Effects of international dividend streaming: stylised examples

    6   Labour Market Issues
    6.1   The influence of labour-related issues on ADIA
    6.2   Direct labour costs
    6.3   Labour flexibility
    6.4   Summing up

    7   Environmental Regulation
    7.1   Introduction
    7.2   Concerns with environmental regulations
    7.3   Proposed code of conduct
    7.4   Is there a role for government?
    7.5   Effects of government action

    8   Native Title Issues
    8.1   Introduction
    8.2   The Native Title Act
    8.3   Impacts on ADIA
    8.4   Major areas of concern relating to the Native Title Act

    9   Other Domestic Policy Influences
    9.1   Transport issues
    9.2   Competition policy

    10   Foreign Government Measures Affecting ADIA
    10.1   Introduction
    10.2   Measures affecting foreign investment
    10.3   APEC measures affecting ADIA
    10.4   Current libralisation initiatives
    10.5   Desirable features of an international investment agreement
    10.6   Implications for Australia's approach

    APPENDICES

    A   Public consultation

    B   Trends in ADIA and other investment

    C   Surveys on motives for offshore investment

    D   Industry Commission survey of offshore investment

    E   Survey of empirical studies on the impacts of offshore investment

    F   Econometric estimation of the impact of ADIA

    G   International approaches to investment libralisation

    References

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