Australia Corporate Treasury Market

Australia has diverse markets for its economy with the majority within services covering 61% of its GDP, construction 8.1%, mining 6.9%, manufacturing 6%.

Though mining is only approx 7% of its GDP, Australia is the world's largest exporter of coal. Australian mining companies are essential to China's growing economy and strong investment from China has tightened relationships between these 2 countries, making China Australia's largest trading partner. That also explains why the recent trade war between US and China will negatively impact Australia.

Corporate treasury services

1. There are no exchange controls on its currency and foreign entities making direct investments in Au are cross-checked by the foreign investment review board. 
2. Its financial service is supervised by Australia prudential regulatory authority and RBA is responsible for monetary policy with the objective of maintaining a strong financial system and stability.
3. AU is a founding member of FATF and played roles in drafting FATF recommendations
4. Australia has anti-money laundering and counterterrorism-financing legislation in place.

Banking service
A highly competitive sector with 54 authorized banks where 40 are foreign owned and 14 domestic with Commonwealth Bank of Australia, ANZ, Westpac and NAB having the majority.

Taxation
Tax on corporate income is 30% with capital gains are taxed as income. Interest paid to Non-resident has 10% withholding tax and thin cap maximum allowable debt is 3:1. Interest expenses that are used for business purposes are generally tax deductible. Australia has tax treaties with more than 40 countries and territories.

Accounts
Accounts are available in domestic and foreign currency with no restrictions. For non-residents, they can hold foreign and domestic currency accounts and domestic currency accounts are freely convertible to foreign currency.

Liquidity management solutions

1. Interest optimization, notional pooling, and cash sweeping are allowed for resident and non-resident.
2. Banks offer interest-earning accounts and able to move surplus to higher earning accounts overnight. 
3. Allow short term investments via CDs, government securities, bank accepted bills and commercial paper

Regional treasury centres

1. Its financial centres are in Sydney and Melbourne with an established legal system, highly skilled English-speaking workforce and excellent business infrastructure.
2. In 2017, Australia positioned itself as a renminbi settlement hub for the Asia-Pacific region. 
3. Their foreign-exchange market is liquid and the established clearing and settlement systems to facilitate smooth financial transactions
4. They have also recently launched NPP in 14 Feb 2018
5. Australia is also a member of APN (Asia Payment Network)
6. Electronic and internet banking are very prevalent in the country and available from all major banks

Payment systems

RITS

1. RITS, AU RTGS settlement system operated by RBA
2. Final settlement is done through exchange settlement accounts (ESAs) maintained at the RBA.
3. Processes participants' transactions in the securities settlement systems, Austraclear and the Australian Stock Exchange's Clearing House Electronic Sub-register System
4. Perform settlement for participants' net balances from other clearing houses.
5. Settles interbank transactions in real time and with immediate finality if funds are available in ESA
6. Recently FSS, FAST Settlement System is launched with 24/7 service

NPP

1. Recently launched payment system to settle payments for business, retail consumers and governments
2. Payments are cleared and settle in real time unitary
3. PayID feaure to initiate payments without account numbers

High value clearing system

1. Processes high value and urgent interbank transfers for the AUD currency portion of FX transactions
2. Payments processed in real time and immediate using the SWIFT Payment Delivery System (PDS) and then settled unitary with RITS.

Australian Paper Clearing System

1. Processes AUD-denominated cheques and MICR paper-based instruments
2. Deferred net settlement system and settle on next business day or same day via Bulk Electronic Clearing System

Bulk Electronic Clearing System

1. Processes low value electronic transactions, regular direct debits and direct credits for consumers and businesses with max cap  value at AUD100 million.
2. Deferred net settlement system
3. Final settlement done through Australia's low value clearing systems across participants' ESAs held at the RBA

Payment instruments include

1. Credit transfers with majority electronic based
2. Direct debits mainly for insurance and utility payments. 
• Consumers in the past have the reluctance to use direct debits but it has been changing in recent years. that is why we can see bundle promotions from utility companies to offer discounts if using direct debits for payments
3. Credit cards are increasing based on RBA reports and widely used electronic payment
4. Digital currencies are thriving in Australia where AU has a cryptocurrency market.
• The government has introduced regulations which require digital currency exchanges to register with Australian Transaction Reports and Analysis Centre (AUSTRAC). 
• Cryptocurrencies are legal tender in Australia
5. Cash, cheques are currently declining