To What Extent Does Business Dominate Industry Policy in Australia - Coursework Example

To What Extent does business dominate industry policy in Australia? Student name Instructor name Institution Date Introduction Industry policy in Australia is necessary to enhance the competitive edge of the country in the global stage. There are currently regulatory burdens and high cash costs hindering business. The change of industry policy will make Australia viable for doing business (Anderson, 2012). Adoption of the new policy will protect the industry from losing market share to other countries. The extent to which Australia business dominate industry policy depends on the nature of the business, business horizons of the business and government policy in different industries. Most business dominates industry policy in terms of taxation, access to subsidies, research and development and the possibility of black market activities. Business dominance in industry policies depends on nature of industry and government interest in the particular industry. Policy implantation can take the form of taxes, subsidies or restriction of imports to protect small and medium businesses. This paper will focus on creative and mining industries and impact of Australia business in relation to policy decisions making. Discussion Some business requires protection while others regulation. There is stiff competition in global mining industry. Rapid cost escalation in the mining industry will force Australian businessmen to lose market share. The Australia industry policy revolves around environment and planning, tax reforms and industry relations (World Bank, 2007). Punitive tax regimes will increase the cost of doing business and scare away foreign direct investment. Introduction of Minerals Resource Rent tax was bad for doing business. The tax will make investors prefer to invest in overseas minerals to investing in Australia. This is because of the exorbitant tax on mineral resources. Industry policy clears spells relationship between miners and suppliers. An industry policy that brings together buyers and sellers will encourage innovation and market efficiency. Industry policy that protects infant business will protect start-up businesses from breaking up before full establishment (IFC, 2012). It is the government that real creates the market. Continuous regulation of industry kills business as there are no perfect market and industries. In Australia, government intervention is to the extent of benefiting start-up business. This is unlike other countries where the role of government is to advance the business interest of big companies. The four influential industries in Australia are gambling, banking, mining, and superannuation. The industry policy in Australia requires employers to deposit 9% of workers’ pre-tax wages in superannuation account (World Bank, 2013). The employers are not supposed to withdraw any of the money until retire. The new policy demands the deduction to increase to twelve per cent. This will make workers in Australia to be customers of specified industry. The big four banks in Australia are among top eight profitable banks in the world. According to international monetary Fund, Australia enjoys a profitable banking system in the world. The industry policy allows acquisition of small banks by large established banks. Gambling industry is small but very lucrative in Australia (Smith, 2012). Creative industries in Australia are made of small and dynamic firms located in rural areas. The industry policy supports the creative business through nurturing talent. Favorable industry policy ensures local talent to be globally competitive. The growth of creative content intends to optimize commercial capacity in the country. Cultural policy safeguards the business interest of creative talent in the country. The Cultural policy will encourage creative business to develop more content that is globally competitive. Positive response of creative businesses will further economic investment and stimulate interest in the industry. Favorable industry policy in the country encourages local businesses to invest as there is surety of interest (IMME, 2014). Businesses influence industry policy advanced by the government. The creative industry in Australia is composed of music, film, radio, television, interactive content and visual arts. The role of industry policy is to encourage competition and protect a young business from stiff competition (Beaton-Wells, 2003). The creative arts industry enjoys low taxes so as to develop the industry. There is a low charge of taxes as compared to industries such as mining industry. The mining industry faces a minerals tax to discourage foreign investors from the exploitation of scarce mineral resources in the country. The favorable industry policy has made creative businessmen to be futuristic in their approach. Futuristic approach in business demands the industry regulators to protect business from unhealthy and black market activities. Establishment of property rights and imposition of heavy fines on pirates will enable business to operate in the long run (Breen, 2007). Business development services influence industry policy in regard to provision of incentives. Business innovation requires through research in market demands. Business people harness research ideas and government funds viable business ideas. Effective market research ensures consumer demand is realized in the long run. Optimal business capacity improves business development and it is easy to identify markets. Industry policy provides for government support of business and market innovation. This is through research incentives and tax exemptions on creative services and products in the market. Creative businesses require copyright and intellectual property rights to survive in future (Turpin, 2007). Industry policy safeguards the rights through imposition of heavy fines on those who violate the rights. It kills innovation when one person develops an idea and other just benefits from the idea. Black market activities are very minimal in Australia. Business people can venture in long term business without fear of collapsing in the short run. Business creativity can only grow through innovation. Innovation can only grow through competition. Competition can only be viable if there if regulation of the industry. Business community requires regulation of the industry so as to protect young and infant businesses in Australia. Business regulation will prevent unhealthy competition from foreign established business companies. This is through regulation and introduction of tax policies in key sectors of the economy. The objective of the government policies is to alleviate abject poverty. There is cautious approach in the green economy policies. This is because it will kill small business investment in petrol stations. Business people argue that coal mining is not very capital intensive for small businesses. Coal mining will make Australia to be largest export earner. Government policies need to be supportive of the mining industry to avoid establishment of barriers to entry. Large economies of scale will discourage small businesses to even imagine joining the mining industry. Viable industry policy will create viable and competitive environment. Business research and development enriches applicability of industry policy. Industry policy makers consider impact of different policies on businesses before fully implementation. The essence of industry policies is to broaden revenue base for both government and individual businesses (Charlesworth, 2005). The higher the business profits, the higher the economy grows. Policy makers will not pass policies which will hurt fortunes of business people in a particular industry. Different business factors influence industry policy. The first factor is the nature of business. Some businesses require protection while others require regulation. Regulation of business ensures there are no business malpractices. Business protection ensures there is health competition in the industry. The second factor is the business horizons of a particular venture. Business horizons refer to either futuristic or short term business considerations of a particular business. Industry policy will encourage futuristic approach to business through passing of protective legislation. Industry policy aims to improve business productivity. The going concern approach ensures business takes long term business horizons. The extent to which businesses influence industry policies in Australia depends on the business contribution to the economy. Business influences industry policies through continuous research and effective utilization of business incentives. Value addition in business requires industry policy makers to discourage imports and encourage exports (Enright, 2013). Value addition is core in business development. The government of Australia requires businessmen to engage in a business that are globally competitive. The mining industry in globally competitive and the government provides business incentives to its citizens to venture in the business. Conclusion Regulation of industry can either aid business to grow or stagnate for a long period. Australia business influence policy in the industry through continuous business research and development. Continuous research makes business globally competitive. Industry policy influence business through taxation and provision of subsides. When an industry policy introduces quantity tax on a particular good, this is passed by the business firms to the consumers. Taxes can sometimes increase the cost of a good more than proportionate. The implication in this policy is a tax distortion that will hit consumer welfare. Industry policy makers consider the impact of different policies on businesses before full implementation. The essence of industry policies is to broaden the revenue base for both government and individual businesses. Business protection takes the form of intellectual property rights while business regulation takes the form of business licenses and registration requirement. The mining industry in Australia faces strict regulation, and this discourages business. On the other hand, the creative industry enjoys protection from black market activities. This is through enforcement of intellectual property rights and lack of incentives for foreign investors. The absence of incentives is to protect coal resources. The government has also introduced mineral resources tax as a regulatory measure in the mining industry. References Anderson, G. E. (2012). Designated drivers: How China plans to dominate the global auto industry. Singapore: John Wiley & Sons. Beaton-Wells, C. (2003). Proof of antitrust markets in Australia. Sydney: Federation Press. Breen, M. (2007). Rock dogs: Politics and the Australian music industry. Milton, Qld: Wrightbooks. Charlesworth, H. (2005). The fluid state: International law and national legal systems. Sydney: The Federation Press. Enright, M. J., & Petty, R. (2013). Australia's Competitiveness: From Lucky Country to Competitive Country. Hoboken: Wiley. How to reform. (2006). Washington, DC: World Bank. International Finance Corporation., & World Bank. (2012). Doing business in a more transparent world: Comparing regulation for domestic firms in 183 countries. Washington: World Bank. 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