European Union Investment in Australia 

2009 update on Investment Survey

August 2006

Summary

Foreign investment is becoming increasingly important in a globalised world and brings with it significant benefits to recipient countries. The European Union (EU) is the largest overall investor in Australia, providing 34% of its total foreign investment and its largest direct investor with 35%. To gain a better understanding of the impact of this investment, the EU diplomatic missions in Australia undertook a survey of EU companies within Australia during the first half of 2006.

The survey confirmed that the EU makes a significant positive contribution to the Australian economy:

• There are approximately 2,300 EU companies with a presence in Australia which have a total estimated turnover approaching $A180bn or just over 12% of total sales in Australia.
• EU companies in Australia have directly created an estimated 400,000 jobs. When account is taken of the flow-on (multiplier) effects, EU company activities are possibly responsible for a further 775,000 jobs, making the total direct and indirect employment generated by EU investment at over 1.2 million or around 12% of the workforce.
• EU companies' predominance in manufacturing means the EU makes an important contribution towards providing locally manufactured products which may otherwise have been imported. Further, a number of EU companies are key exporters (e.g. one is the largest single exporter from New South Wales, whilst another is the largest exporter of Australian wines). A conservative estimate suggests that exports from Australia by EU companies significantly exceed $A8bn a year.
• EU companies make a particular contribution to the NSW economy, with over 60% of total EU company turnover and 75% of total EU employment generated by companies having their head offices based in this State. Victoria is the second most important location for EU companies, accounting for over 30% of total EU turnover and 15% of EU employment, followed by Queensland with 5% of EU turnover and 8% of EU employment.
• A range of other secondary benefits from EU investment were also highlighted in the survey including: introduction of knowledge know-how; technology transfer/spill-over; research and development; training; improved products and services; productivity improvements and cost savings; development of new industries; enhanced rural development; facilitation of Australian companies wanting to export; tax revenue; corporate social responsibility and charity contributions.

The survey also explored whether EU companies were experiencing problems in entering and/or operating in the Australian market. A wide range of problems were raised but no particular issues dominated.

The problems faced included:

• visa problems for short-term EU staff;
• quarantine problems either due to overly restrictive requirements or changing requirements;
• problems with customs regulations;
• lack of transparency on requirements for imports;
• difficulties in meeting different technical requirements for the Australian market;
• union power, notably in the construction industry;
• inadequate protection provided by Australia's intellectual property regime;
• regulated monopolies in some sectors; foreign investment restrictions or conditions in some sectors;
• issues over tax, royalty and other government fees; and
• problems with the requirements for the recognition of professional qualifications.

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For further information please contact:
John Tuckwell, Senior Adviser, Economic and Trade; Tel 02 6271 2734; Email: john.tuckwell@eeas.europa.eu

Media Enquiries: Roger Camilleri, Senior Adviser, Media & Public Affairs ; Tel 02 6271 2744; Email: roger.camilleri@eeas.europa.eu

This page updated July 5, 2011