Opportunities for 2003

Australian Information Industry Association (AIIA) lobbies federal and state governments to provide an internationally competitive business environment for the Australian ICT industry.

One of the key issues is the proposed Free Trade Agreement (FTA) between the US and Australia, with negotiations to take place in Canberra in March in what is set to be a complex and lengthy process.

How will the FTA be relevant to Australian software developers?

Well, the negotiations are an opportunity to remove any trade barriers impeding sales of Australian software and services to the US market. Possible areas of interest are government procurement and the movement of people.

Take government procurement for example. The US Government has a $US52 billion annual IT budget. Access to this market is regulated in part by the Buy America Act of 1933 which stipulates that US Federal Agencies must purchase goods produced or made in the US or in countries which are parties to the World Trade Organisation (WTO) Agreement on Government Procurement. As Australia is not party to this agreement, many businesses cannot enter the lucrative US government market, or have to find a way around the barrier. If an FTA can be negotiated, this barrier could be lifted providing the Australian industry with unprecedented access to this rewarding market.

With the Australian government remaining at the forefront of e-government and the application of ICT to government administration, this is a real area of opportunity for Australian developers. Experience gained in supplying software to Australian government agencies will be a sound base for success in the much larger US government ICT market.

In a related matter, the two governments announced mid-2002 the signing of a protocol to amend the current double taxation arrangements between the two countries. The changes proposed in this comprehensive set of measures would allow for the removal of withholding tax on certain dividends and a reduction in withholding tax on royalties. Significantly, financial institutions will also be exempted from withholding tax.

Many Australian software companies have established US operations over the past few years and others are following suit. These changes will benefit these companies greatly. I urge developers who have experience of the US market and are aware of issues that should be addressed in the FTA negotiations, to contact AIIA so that we can make sure we get the best possible outcome for these negotiations.

* Rob Durie is executive director, AIIA.

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