British Economy: UK strengthens trade ties with Australia
Updated 18:37, 23-Jul-2019
While Great Britain focuses on formally exiting the European Union, it's also laying the foundation for a post-Brexit economy. That includes promoting trade relations with several countries including Australia, and trying to lure companies with incentives. Greg Navarro explains.
The move to launch a business that compares products for consumers has been a successful one for finder.com co-founder Fred Schebesta.
"From your credit card, your insurance policy to your cellphone plan, you can compare it all there."
The company has grown in Australia, and ventured overseas including into the UK, where Schebesta says he may consider moving his headquarters.
FRED SCHEBESTA, CO-FOUNDER FINDER.COM "A lot of companies are looking to figure out where to put their headquarters. It's a big deal, it's a big deal where your headquarters are because that is where you are going to pay your corporate taxes."
It's the kind of move the UK is encouraging as it attempts to build a post-Brexit economy. For many tech companies and start ups, the range of incentives being offered, including tax breaks, is tough to ignore.
FRED SCHEBESTA, CO-FOUNDER FINDER.COM "Now if it is 50% cheaper from one country to another that means you can invest more, you can hire more people and the company can grow faster which is great."
But it is unclear how long those benefits may last.
ASSOCIATE PROF. HUSSAIN RAMMAL INT'L BUSINESS AND STRATEGY, UTS "Short term yes, you will have that opportunity, have some benefits to go in there, might be some tax incentives, might be things like rent incentives, lower rent, whatever might be the case but we don't know the long term and that won't be resolved until we know exactly what the UK is going to end up with."
The UK isn't just focused on tech companies and start ups. It's also looking to sign free trade agreements with several countries including Australia once it formally leaves the EU. The two countries signed an agreement earlier this year to help smooth the transition for exporters, including Australian wine producers.
GREG NAVARRO SYDNEY "There is a theory that UK's exit from the European Union offers no great advantage for Australia's economy. In fact, it could be a greater source of competition."
PROF. TIM HARCOURT, ECONOMIST UNIVERSITY OF NEW SOUTH WALES "I actually think Britain being tied to the EU has been quite good for Australia because I think Britain has been so tied up with red tape in Brussels that they haven't been as competitive as they could be in China and ASEAN and Japan and Korea so Australia has been let off of the hook, now we will have a more competitive Britain."
Schebesta is convinced the decision to branch out into the UK - despite the uncertainty around Brexit was a smart one.
FRED SCHEBESTA, CO-FOUNDER FINDER.COM "The UK has a very well established economy, they are very good at marketing into Europe."
Greg Navarro, CGTN, Sydney.