The Competitive Advantage of Australian businesses

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Failure on gas could hit GDP by $14bn Tasker (2013) reported that Australian government is developing new gas supplies in New South Wales (NSW) but failure of this development would not only affect the wholesale price index of market in the country but also cause reduction in Gross Domestic Product (GDP) by more than $14 billion in next 22 years. Although, Australian Petroleum Production and Exploration Association (APPEA) states that the country has a significant amount of scope to develop its gas and petroleum reserve in the east coast but there is an argument that development of coal-seam gas would negatively affect the economic growth of the country. Tasker (2013) reported that at present, NSW imports gas from other states and developing gas would definitely reduce gas price in the state. There are three pertinent issues in this case such as 1- developing CSG assets in NSW would increase resource capability of Australian government and that would decrease wholesale price index and volatility of economy in the country (Tasker, 2013). Developing gas reserves in NSW would help the Australian government to create jobs in the area between Newcastle, Sydney, and Wollongong. 2- Developing CSG assets in NSW would be a matter of great interest to local oil companies in Australia. As of now, 95% of gas resources are being imported by NSW and local companies need to pay heavy amount of tax to use the imports but development of gas resources in NSW would probably increase resource availability of local Australian oil companies and due to the availability of gas, gas export-driven revenue for local oil companies would shot up (Tasker, 2013). 3- Developing the gas sector would probably increase national competitiveness of Australia and provide an opportunity to multinational oil companies to enter the gas market in NSW. However, developing gas and oil sector in NSW could decrease command of international companies over Australian companies regarding the supply of gas and crude oil. It’s expected that Australian companies would go for low-cost local gas supply rather than importing it from International players and such change in the supply-demand equation would decrease the bargaining power of international oil companies (Tasker, 2013). Australian businesses must grab Indonesian opportunity Durie (2013) reported that Australian government is trying to increase business transactions with Indonesia and it is quite evident from the visit of Australian Prime Minister to Indonesia in order to strengthen the business, economic and political tie-ups. At present, Indonesia is the fourth largest country in terms of population in the world and the country can be the potential doorstep for Australian companies to enter the business environment ASEAN countries. The Australian government is also taking help of the leading companies such as Leighton, ANZ and Coca Cola to decide the business and trade policies that could increase ease of doing business in Indonesia. Three implications of this article can be briefed in the following manner. 1- Australian government is trying to boost up its economy and GDP growth by increasing trade transactions with Indonesia (having GDP growth over 6%) and also trying to achieve the first-mover advantage for exploring trade opportunities in Indonesia. Developing trade relationship with Indonesia would help the Australian government to access agricultural yield of the later and that would address food shortage issues in the country Durie (2013).