Fed: Australia a safe place to do business
By Colin Brinsden, Economics CorrespondentFri Aug 21 01:07:09 EST 2009
CANBERRA, Aug 20 AAP - Australia is considered one of the world's safest countries to do business in, given its relatively mild economic slowdown compared to other economies that have been ravaged by recession.
A new report ranks Australia in the world's top four countries to invest - ranking in line with Canada, Norway and Switzerland.
But other data released on Thursday showed that while consumer confidence has surged in recent months because of this economic resilience, Australians are not keen to rack up new debt on their credit cards for fear of losing their job.
D&B's Global Risk Indicator gives Australia the fourth highest possible rating, with no other country rating higher.
"This is good news in terms of international investors' perceptions of doing business in Australia, and in particular investing in Australia," Prime Minister Kevin Rudd told parliament - still glowing from the signing of a $50 billion LNG contract with China this week.
The D&B indicator assesses economic, commercial, external and political risk to provide risk ratings for 131 countries around the world.
The highest possible rating is DB1a.
Australia, Canada, Norway and Switzerland were rated DB1d.
Within the Asia-Pacific Region, Japan, Hong Kong, New Zealand and Singapore were ranked in the DB2 range.
"Australia's rating demonstrates that although the nation is facing a number of challenges, it is faring well compared to others amidst the current global economic crisis," D&B CEO Christine Christian said releasing the report.
She said the rating shows that Australia is a low risk environment for business investment.
"The world is continuing to change at a rapid pace and although Australia is faring well compared to other nations we cannot afford to stand still," Ms Christian said.
"When the rest of the developed world recovers and returns to economic growth, global competition will intensify.
"To keep our position in the top four safest countries, Australia's regulators will need to ensure that their focus on reform and strong economic management continue."
The Reserve Bank of Australia also released it's monthly credit card report on Thursday. It showed Australians spent $19.4 billion on their credit and charge cards in June.
This was an increase of more than nine per cent from the previous month and the highest monthly total in 2009.
But they also made $19.3 billion in repayments on their credit cards in June, up 7.3 per cent from the previous month.
Commonwealth Securities economist Savanth Sebastian calculated that the average credit card balance was $3,127 in June, down 0.2 per cent over the past year.
"Consumers continue to embrace the new era of consumer conservatism - no doubt a trend that is likely to be in place over the next year until the economic recovery gains a strong foothold," Mr Sebastian said.
He said while retail sales have picked up over the last few months, consumers appear to prefer to use existing cash, rather than racking up additional debt.
Eftpos and debit card purchases are 17 per cent higher than a year ago, while credit card usage has dropped 11 per cent.
"The unemployment rate is expected to rise in the near term and concerns over job security will continue to weigh on spending decisions," he said.
