Top misconceptions in language translation for business

Translation of your business messages into foreign languages looks easy these days with the Internet at your fingertips and bilingual friends on call. 

However, often these friends will translate your messages into the foreign language quite literally.  They will take your words and pose the exact referenceable words against them.  They will not rephrase them to make them more readable, nor check the grammar, sentence structure, vocabulary and expressions that might be local to a particular market.

When you write for a country or region of the world, you must localise the meanings and intents of metaphors and statements and make your words natural to the reader in order to be taken seriously as a real business constituent.

When you think about it, translating an important business message using the wrong tools could frankly be very dangerous.  For example, Julia Gillard’s Chinese version of Australia in the Asian Century contained broken sentences, grammar and syntax errors, inappropriate vocabulary and incomprehensible expressions, leading many to question how it was prepared.

The Australian newspaper reported that "It is reasonable to suspect that the person who translated this white paper relied heavily on Google Translate, not their Asian language skills."

Further to this, modern day machine translation systems (MT) have become much more advanced than the capabilities offered online, and can recognise common linguistic differences in a way that Internet systems cannot.

Today, we break down some myths and mysteries to explain what you really should know when considering translation for business purposes.

1. There is a lot more involved in high quality translation than you think

You may think that you just need a translator but in essence, to guarantee high quality materials, you will need a lot more. International campaigns, documents, collateral and websites will not only involve translation, but localisation, checking, revision, editing as well as desktop publishing and file handling.

Think about how long it took you to create that English brochure? Materials created for a foreign audience will require a little more care in their preparation. You will often need a second pair of eyes, an industry expert to verify terminology, and an editor for final publication. Also, you will often need project management to handle your file formats, connection to your content management system and your internal systems.

2. Bilingual friends or colleagues could do more harm than good

Translating business documents or marketing materials through bilingual colleagues or friends can be dangerous, as they might not be familiar with the subject area or could be from another region of the country you are translating for. Or, they might be native speakers, but do not have an excellent command of the language, or they might know enough about the subject matter, but their feedback might not be relevant or helpful.

Don’t get me wrong, there is a very useful place for these bilingual contacts, but they need to be given clear and precise instructions when translating business and marketing documents. Questions like "Is the message getting across?", "Does the translation use the right language for the target market?",  "Could messages be misinterpreted?" –  instead of just “ What’s your opinion?” – should be asked.

3. Machine Translation is more than Google Translate

You may think that Machine Translation (MT) systems are just a version of Google Translate, but in fact, the term refers to professionally programmed IT translation engines, trained for a specific technical subject, trained with millions of approved TMs (translation memories) and fed with a high volume of technical data to be able to produce a fast and pertinent output against a source text that has been written specifically for MT purposes.

The translated text is then still revised by human “post editors”. The use of the tool enables people to be more efficient on repetitive tasks that can be automated, and to use the skills of high quality translation professionals for more complicated translations.

MT is not to be confused with Translation Management Systems. These handle complicated file formats and can hold translation memories of entire segments of translated text in a database. They assist the translator to achieve consistency when similar terms and contexts come up again in future translation and can often save you, the client, money when many repetitions occur in high volume texts.

4. A back translation will not give you the full message

An ad agency was recently outraged when they used back translation to have a German translation translated back into English, and read that someone was "going to eat a broom"!  You see… pigs fly in the English language, but Germans will eat a broom if they don’t believe something will happen. It is because of these nuances that back translations should not be used to measure quality. Back translation should only be used in rare circumstances and done by a language professional who knows how to interpret the results. Independent checkers, focus group testing, community feedback and industry editors are a much more efficient way to ensure quality of the intended message.

5. High quality input gives high quality output

You may be committed to getting high quality translation, but if your own message is not clear from the start, it is difficult for the translator to guess what you mean and transmit it.  For best quality, a clear source text must be provided and translators should be equipped with as much information as possible such as background, style guides, related articles, links, glossary lists, anything you have to ensure the translator fully understands your subject and your message.

6. Don’t mix and match your translators

Translators become familiar with your style, terminology and subject area. So, if you have a good one, stick with them and train them to your needs. Even if you have glossaries and style guides, consistency is best achieved by continuing to work with those who are familiar with your content.

Using various different providers can result in mixed messaging and less efficiency in your translations. Very often, changes in translations are a matter of personal preference or ignorance on background knowledge, and you may find yourself spending a lot of time just redoing the versions, when it was often only matter of opinion.

As you can see there are many considerations in getting the quality right when translating for business. With translation, it can sometimes be a bit like picking up your car from the garage and wondering… what did the mechanic really do? But of course, there are varying degrees of services that can be applied for different types of outputs required. A high quality provider can show you the options and guide you through the process to ensure that your message hits the mark with your target audience.

Written by Tea C. Dietterich, Director of 2M Language Services. 
P: +61 7 3367 8722
W: 2m.com.au
E: multimedia@2m.com.au

Double whammy for Australian retailers?

This article was prepared by Freight & Trade Alliance and does not reflect the opinion of the Export Council of Australia (ECA). The ECA understands that these are difficult and complex issues and concerned parties should seek specific advice for their circumstances.

The Australian public has widely embraced Internet trade … and why wouldn’t they?

The dollar has been strong, consumers have a global reach for product selection, the express logistics sector deliver an amazingly efficient service and low value items (under $1000 in value) are free of any government imposed Import Processing Charges, GST or duty.

It is no wonder that traditional retailers have been affected by this.

Retail associations have responded by lobbying for a “level playing field” and forcing the federal government to re-examine the quantum of the threshold and associated implications of such a reform.

Whilst a reduction in the threshold may not be a vote winning move, it would certainly be a more equitable arrangement for the trading sector and would also return considerable GST revenue to state governments.

As well as lobbying the threshold issue, it is a credit to Australian retailers that they have also looked to modernise their practices to remain competitive. One business model adopted has been to centralise overseas distribution centres.

In effect, this has built on an existing and legitimate commercial practice commonly referred to as “assembly order” where multiple suppliers bring cargo to a DC for “pick and pack” to Australia.

As outlined in recent notices to Freight & Trade Alliance (FTA) subscribers, the Australian Customs and Border Protection Service (ACBPS) are now flexing their compliance muscle wanting these consignments to be “split” with a separate cargo report for each supplier.

The reason for forcing this practice is that their Integrated Cargo System (ICS) cannot adequately deal with this scenario of allowing multiple suppliers on a cargo report. This has been a known problem since mid-2005 prior to the system going “live”. Rather than fixing the system over the ensuing 8 year period, the solution now being mandated by Customs is for industry to change their commercial practices.  

Freight forwarders will now have to cut multiple house bills of lading / air way bills (or use some other form of approved document to complete this mandatory data field) and customs brokers will be required to complete multiple import declarations. This gets really exciting when you keep in mind that the already high Import Processing Charges are likely to further increase from 1 January 2014. 

On one hand, ACBPS is leading the way by announcing their “Blueprint for Reform 2013 – 2018” on the other they are still hamstrung by flaws in the ICS.  

The result is that Australian retailers are facing a “double whammy” of competing against Internet trade and are now also facing limitations to legitimate contemporary global supply chain practices.

FTA and the Australian Federation of International Forwarders (AFIF) have provided a formal submission to ACBPS making two key recommendations:

1. Enhancement to the ICS would have the benefits of:

• providing transparency to ACBPS of suppliers’ details;
• avoiding the complexity of dealing with piece counts of packaged consignments;
• negating the need for industry to dismantle existing business models; and
• minimising any increase in supply chain costs.

2. A compliance moratorium is desirable and appropriate until further industry engagement has been completed and ICS functionality is enhanced. We recommended that ACBPS follow this approach with an “informed compliance” campaign to ensure that (a) industry is fully aware of requirements and (b) are operating on a “level playing field”.

It is important to note that despite the ongoing efforts of both FTA and AFIF, currently no moratorium applies.

The ACBPS has received support from other industry representatives who have publicly stated a view that a moratorium is unnecessary and would create further uncertainty for industry. A collaborative approach between these parties has also resulted in the development of a fact sheet in an attempt to address industry’s concerns and to form the foundation for a compliance framework.

Both FTA and AFIF were subsequently asked for our responses to the final draft of the fact sheet and have provided commentary. The final release of the fact sheet provides 10 models which do not include all scenarios or operational issues which FTA and AFIF brought to the attention of ACBPS - the final fact sheet has been released and is available via the FTA Feature Artile at www.FTAlliance.com.au

For further information / clarification, ACBPS have noted that industry should contact the Customs Information and Support Centre on phone 1300 558 099 or email: cargosupport@customs.gov.au

COMMENTARY

The fact sheet, whilst providing some clarity of ACBPS compliance expectations, does not address all operational issues. FTA and AFIF remain committed to reforms in line with its formal submissions.

The scenario of assembly order / multiple supplier import practices highlights an opportunity to enhance ACBPS systems’ capabilities and to integrate reforms with other global initiatives whilst facilitating contemporary logistics practices.

FTA and AFIF will continue to liaise with trade groups and ACBPS to use this issue as a catalyst to give the ACBPS Blueprint for Reform 2013 – 2018  some early momentum and the opportunity to evolve towards a longer term outcome of having in place world leading cargo management systems and strategies.

Paul Zalai – Director FTA

Freight & Trade Alliance (FTA) Pty Ltd
(ph +61 2 9975 1878|È mob +61 408 280 123
Ê www.FTAlliance.com.au |* pzalai@FTAlliance.com.au

 

FREIGHT AND TRADE ALLIANCE (FTA) PTY LTD
FTA represents a cross-section of international freight logistics and import / export trade entities forming an influential advocacy alliance.
As your business partner we ensure that you are at the forefront of all emerging supply chain issues through our responsive operational support, professional development training, pertinent industry updates and corporate events.
For further details please refer to WWW.FTAlliance.com.au

Atradius Payment Practices Barometer Eastern Europe

Atradius International survey of B2B payment behaviour - June 2013

Eastern Europe is heavily influenced by the weak economic conditions in the Eurozone. In particular, countries like Poland, Czech Republic, Slovakia and Hungary, which are nearer to the borders of the Eurozone, are affected by the continued financial constraints experienced by their neighbouring economies, which also puts pressure on their cash flow levels. The increase in long overdue receivables is also contributing to the increase in the value of receivables write offs reported by Eastern European respondents.

Core results:

•  29.4% and 21.6% of the total value of the invoices issued by Eastern European respondents to their domestic and foreign B2B customers respectively are overdue
•  B2B invoices in Eastern Europe are more likely to be paid late due to liquidity constraints of domestic (79.6% of respondents) than of foreign customers (53.2%)
• Uncollectable B2B receivables increased markedly over the past year, particularly in relation to export trade
• Around 45% of the respondents in Eastern Europe become concerned when average DSO is 46 days to over 90 days longer than the average credit period extended to B2B customers
• The majority of Eastern European respondents consider falling demand of products and services and maintaining adequate cash flow to be the biggest challenges to the profitability of their businesses this year

To view the full report, please click here.

For further information:
Atradius Credit Insurance N.V.
5/22 Pitt Street
Sydney NSW 2000
Phone: +61 (0)2 9201 2389 
Fax: +61 (0)2 9201 5224  
Website: www.atradius.com 

Messaging to Multicultural Australia

Author: Tea C. Dietterich 
Director of 2M Language Services
2m.com.au
Ph: +61 7 3367 8722
E: multimedia@2m.com.au




One in four Australians were born overseas, and there are more than 22 million people in our country who all contribute different ideas, religions, languages and customs. The diversity of these people makes Australia a unique place to live and creates multiple and versatile markets for our products and services.

I often talk about international marketing and how to reach your global markets. But we should not forget that LOTE (Languages other than English) speakers have strong purchasing and decision power in Australia, too, and any business would want to get the right messages across to them.

Nelson Mandela said: “If you speak to a man in a language he understands – it goes to his head. If you speak to him in his own language – it goes to his heart.” 

The same applies for our multicultural Australian audience. Although the majority do speak English, it is ideal to talk directly to your customers in their own language.

Whether you are a private or public institution – the aim is to get the right message across to your key audience.

Here are some basic facts on Australia's diversity:

• Since 1945, more than seven million migrants have made Australia their home.
• Around 45 percent of Australians were born overseas or have at least one parent who was born overseas.
• People from more than 200 countries make up the Australian community.
• The top ten countries of birth in Australia are: Australia, the U.K., New Zealand, China, India, Italy, Vietnam, Philippines, South Africa and Malaysia.
• Australians practice more than 100 religions including Christianity, Buddhism, Hinduism, Islam and Judaism.
• More than 300 languages are spoken in Australian homes; the most common apart from English are Mandarin, Italian, Arabic, Cantonese, Greek, Vietnamese, Tagalog/Filipino, Spanish and Hindi.

The changing mix of origins of Australians is always a topic of interest in every Census. We often quote the above statistic that a quarter of the population was born overseas. That figure hasn’t changed much over the years; however what has changed is how that quarter is made up. See details in the below migration chart which shows that the largest increase has come from India and China.

 

Translating for multicultural Australia
When you are translating for multicultural Australia, you are reaching out to Culturally and Linguistically Diverse (CALD) Communities. But before you begin, it is imperative to identify your readership.

Are you a City Council with information for retirees? A Health Department with a brochure for mentally ill? An Internet Service Provider with a website for all age groups? A manufacturer with a product suitable for the Asian Australians? The answers to these questions will help you to frame your messaging and your tone.

How long have they been here?
One example segment could be Italians who have lived in Australia for 50 years. Their terminology and key word usage is very different to Italians in their native country. Their home is Australia, and they are Australian – so, your messaging cannot be compared to what it would be if you were addressing their compatriots in their birth country. A competent translator in the origin country might do an outstanding job translating the text, but will still not give the right message to the Australian multicultural reader, because it is not using their language. Locally known keywords, names or government programs will often stay in English, because that is how they are known - whereas for overseas markets, the translation approach would differ.

What is their age group?
Closely related to above point, the age group will determine the type of language to be used. Tone of language has to be adjusted. This applies to translation in general and is particularly important, as the language of older migrants may not have evolved naturally due to their distance from their birth country.

What is there education level? 
The tone of the translation should be dependent on your target audience, whether it is plain and simple, sophisticated or somewhere in between. The demography and geography of your target audience should also be noted. Convoluted sentences that are often found in lengthy government documents may be a challenge. Essential messages should be portrayed in the right terms for the audience, so that they completely understand.

Consider their health
CALD communities are an important target audience for health departments in government levels as well as for health device manufacturers. The language to be used will differ considerably here as well, depending on the target group. For example, is your health brochure for the mentally ill, or directed at people prone to sports injuries, or at the wide variety of CALD public groups?

What should be left in English?
Often, the question of where and when to use English in key phrases, is a matter of personal preference. For this reason, it is important to establish a style guide from the beginning to determine which terms are left in English and which are to be translated or explained. This can differ from language to language. In German for example, English terms are frequently used and accepted without an explanation. This is contrary to Arabic, where often everything will be translated, numbering included.

However, it is important to note that it is logical to leave the English words in for many instances. This is so the LOTE speaker knows which words to use when they come across that situation in their Australian daily life. It applies in everything from health programs to transport options and everything in between.

Language specific differences
There can also be many subtle differences within a language group. Just to name one example: Serbian can be written in Latin (Roman) or Cyrillic script. Which one should you use?

This proves that you need to check your target audience closely and don’t assume anything.

As you can see, there are many differentiators when translating for CALD communities, and this also includes the design aspect (i.e. which images and symbols to use). It is important to remember that Australia contains a very large multicultural audience that needs to be communicated with in the right way.

In return, we can harness this vital part of our community to share information and knowledge, and to market our products and services.

Japan Market Update

Snapshot:

Population: 27.9 million
Nominal GDP: US$5.8 trillion
Nominal GDP p/c: US$45,920 (2011)
GDP Growth: -0.6% (2011); 2% (2012)
Exchange rate: AU $1 = 90.79 Yen (June 2013)
Major industries: Automobiles, consumer electronics, computers, refined petroleum and civil engineering equipment and parts
Exports to Japan: AU $ 53.1 billion (2011-2012)
Imports from Japan: AU $22.5 billion (2011-2012)

Bilateral Trade Relationship

Japan is the third largest economy in the world in terms of GDP and is characterised by a democratic, constitutional monarchy, respect for the rule of law and commitment to regional security. Japan’s large population and significant number of wealthy, highly educated citizens, makes it one of the world’s largest consumer markets in the world.

Australia and Japan share a strong bilateral relationship which is built on mutual interests, especially in the area of trade. Japan is Australia’s second largest export market. In 2011-2012 exports to Japan were valued at $53.1 billion or 16.8 per cent of Australia’s total exports. Japan sits behind the USA and the UK as Australia’s third largest foreign investor, with investments in 2011 totaling roughly $123.4 billion, of which over 40% was foreign direct investment.

In terms of merchandise trade, Australia’s key exports to Japan are coal, iron ore and concentrates, beef and copper ores and concentrates. In services, personal travel (excluding education) and transport contribute the largest amount in export value. Japan’s key imports into Australia are passenger and goods vehicles, refined petroleum and civil engineering equipment and parts.

Trade Agreements

A Free Trade Agreement (FTA) between Australia and Japan has been under negotiation since 2007. The last formal negotiating round was held from 13-15 June 2012 in Tokyo. However, significant progress has been made since that time and the finalisation of the agreement is said to be imminent.

Two key benefits of the FTA would be reduced tariff and non-tariff barriers to trade and expanded export opportunities for trade in the agricultural sector which is currently quite regulated.

In April 2013 the members of the Trans-Pacific Partnership (TPP) formally invited Japan to join negotiations. Japan will join Australia and 10 other nations already in talks on the TPP: the United States, Canada, Mexico, Peru, Chile, Vietnam, Malaysia, Singapore, Brunei and New Zealand. A deal is hoped to be reached by the end of 2013.

Japan and Australia also sit on a number of regional forums including APEC and ASEAN.

Economic Outlook

There are three key factors that could impact on Japan’s economic outlook moving forward. These include:

• The impact of the 2011 earthquake and tsunami which severely affected Japan’s global supply chains and has left the country with power shortages. Nuclear power constituted 30% of the total energy supply.
• Japan has an ageing population. By 2050, the population is expected to fall by 20 million from where it stands currently at 127 million. With fewer tax payers to fund the increase in expenses associated with an aging population, the government will be forced to increase taxes.
• The weak global economy is hampering the recovery of the Japanese economy following the devastating 2011 natural disasters. 

The Government is expected to continue with monetary easing in an attempt to stimulate the economy, and have increased their target inflation rate to 2 per cent. On a positive note, the weakening Yen is increasing competitiveness and analysts expect the strengthening of global markets, coupled with resilient domestic demand, will enable Japan to emerge from recession by mid-2013. Nevertheless, the future remains uncertain as the country faces an ongoing battle with deflation.

Doing business in Japan

The Japanese are very polite, and business etiquette is extremely important. Politeness, sensitivity and good manners are the pillars of Japanese business etiquette. When doing business in Japan, also take note of the following:

• Business cards should be printed with English on one side and Japanese on the other. It is not so important to have you address translated, more so you name and company name. Carry at least 100 cards for a one week business trip. Present your business cards with two hands and with the Japanese side facing upwards to the most senior member of the Japanese party first, bowing slightly as you do so. NEVER write notes on a Japanese business card, treat them with respect and store them away only after the meeting closes.

• English is not widely spoken in the business world so an interpreter is normally required 
• Japanese business attire is formal. Men should wear blue or black suits, a white shirt and subdued tie. Women should be conservatively well dressed, wearing either trousers or a longer skirt suit.
• When it comes to attending business meetings, be sure to arrive at least 5 minutes early and call ahead if you are running late. Wait to be seated. It looks good to take a lot of notes during the meeting at it shows your interest in the matter.
• Do not shake your hosts hand when first meeting as the Japanese seldom shake hands. Be pleasant and do not speak derogatorily about anyone, even competitors, be willing to learn and ask lots of questions (just not about their personal life).

Opportunities for Australian Exporters

Prominent sectors including energy, education, food and agribusiness, have been identified as export growth markets. However, for Australian exporters, the focus should be on higher value-added and knowledge intensive sectors such as the life sciences, information technology, nanotechnology, aerospace and environmental technologies. These sectors are seen to offer the most promising prospects for exports growth to Japan.

• Opportunities in niche markets for exporters also exist in the following areas: 
  
• biotechnology and nanotechnology
• building materials and products
• bloodstock and equine industry
• creative industries including architectural design and arts
• clean technology and renewable energy
• education and training
• food and agribusiness
• health and lifestyle products and services
• mining
• energy infrastructure
• finance and investment.

Tariffs and Taxes

Japan has low or zero tariffs on most industrial products but maintains tariffs and restrictions on some agricultural items. Australian products enter the country at the lowest rate notified, with the exception of preferential rates, with a ‘self-assessment’ system designed to accelerate customs clearance allowing prior calculation of duty by importers.

36th-Parallel Geopolitics & Strategic Assessments: Asia Pacific/Latin America Strategic Architecture Assessment Part 1

Executive Summary

The South Pacific is rapidly becoming an area of economic and political importance. Spanning the waters from the equator to the Southern Ocean between the West Coast of South America and the East Coast of Australia, Papua New Guinea and Indonesia, the region is characterized by great travel distances, a broad range of nation-states, a maritime orientation and previously inaccessible resources. During the last thirty years technological, economic and political change has seen the region emerge as a strategic arena in its own right, with both resident and extra-regional actors now vying for influence and wealth. In this two-part assessment 36th Parallel outlines the major features of the strategic architecture underpinning this evolution.

Part One: Introduction and Overview.  

Until the late 20th century the strategic importance of the South Pacific was only apparent during wartime. With the revolution in transportation, telecommunication, services, production and exchange that swept the world economy over the last three decades, the South Pacific has increasingly become a region of major economic importance. This includes the sea lines of communication that connect Asia to Australia, New Zealand and the West Coast of South America, as well as the increasingly exploitable natural resources above and below water in Melanesian and Polynesian island states, the open waters between them, as well as along the Eastern and Western South Pacific Rims. With trade and production trend forecasts predicting continued growth in Australasian-South American commerce, the region has assumed previously unknown prominence.

The three main legs of South Pacific strategic architecture are Trade, Politics/Diplomacy and Security.  Although intertwined and overlapped, they can be analytically distinguished from each other. These “pillars” span three distinct sub-regions: the Southeastern Pacific, which extends westwards 2500 kilometers from the South American coast line from the Equator to Chilean Patagonia; the South-central Pacific, which occupies 3000 kilometers of mostly open water between the Equator and the Southern Ocean west of Easter Island to Fiji and Rarotonga; and the Southwestern Pacific, which covers the 2000 kilometers of water and land masses extending from Australia, Indonesia and Papua New Guinea to Fiji and the Cook
Islands (distances approximate).

The pillars of the architecture can be respectively sub-divided into Production, Commerceand Services,  (with regard to trade), regime type and stability, local political culture and foreign relations (with regards to politics and diplomacy); and enforcement authority and armed force (with regard to security).

To continue reading this report please click here.

Atradius: May Economic Outlook 2013 - Asia-Pacific Focus

Sydney, Australia 4 June 2013 – Atradius has released the Economic Outlook for May 2013. It follows from last November’s Economic Outlook which argued that we had possibly moved away from the abyss of another economic crisis. In our latest edition we have found that this is not necessarily the case.

The global economic environment has weakened over the past 6 months and we expect only modest economic growth in 2013. 2012 ended with just 2.6% global growth and a 0.5% contraction in the Eurozone. Global growth is projected to improve at the end of the year due to a better economic performance in the United States and stabilisation of the Eurozone economy. However, there is a high risk that economic growth will be even slower than pictured in this outlook.

Global growth is expected to stabilise and reach 2.6% in 2013, more or less the same rate as last year, as growth in advanced markets remains sluggish and emerging markets continue their strong performance. The global economy is forecast to gain speed at the end of the year and improve in 2014 to 3.2%. Emerging markets remain the driving force of global growth. Asia, excluding Japan, is expected to grow 6.6% this year, largely thanks to China, whose growth is projected to reach 8.2%. Asia remains the driving force of the world economy. With economic growth in Asia buoyant again, Latin America’s economic environment will receive a boost this year as the continent is an important supplier of commodities, industrial products and goods to Asian markets. Recent economic developments in Brazil have not been as positive as expected at the end of 2012, when a mild recovery to fuel a broad-based domestic upswing in 2013 was anticipated.

The weak global outlook is consistent with a stabilisation of the insolvency environment in many markets, with the aggregate insolvency frequency even improving marginally in 2013. The Eurozone shows a moderate increase in the already high level of insolvencies, while the Eurozone periphery will see a more significant increase. Conditions improve in the Asia-Pacific region and the United States because of their relatively better economic conditions. Applying our insolvency assessment framework (page 34), we expect the number of insolvencies to remain more or less stable across major markets in 2013. The insolvency environment continues to improve in the Asia-Pacific region, with Japan and New Zealand seeing insolvencies drop by 2% and 3% respectively. The insolvency matrix for 2013 indicates the insolvency situation for Australia as average but also still deteriorating with an expected insolvency growth of 3% in 2013. While the overall insolvency environment stabilises, we forecast rising insolvencies in 10 out of the 22 markets that we track. Eurozone countries in particular will see a further increase due to the ongoing weak economic conditions. In general terms, credit risk is elevated and will remain so throughout the forecast horizon.

Looking at the macroeconomic headline forecasts figures for Australia, the GDP growth is expected to decrease from 3.6% in 2012 to 2.5% in 2013. It is forecasted to increase to 2.9% in 2014. Inflation is expected to remain the same for 2014 at 2.5% as it was in 2013, and increase to 1.8% in 2012. The export growth for Australia in 2012 was 6.3%, decreasing to 4.8%, with a further decrease forecast to 2.7% in 2014.

For New Zealand, GDP growth is expected to decrease from 3% in 2012, to 2.7% in 2013, forecasted to then increase to 2.8% in 2014. Inflation is expected to increase from 1.1% in 2012 to 1.4% in 2013 with an additional increase to 2.3% expected in 2014. Export growth is expected to increase from 2.1% in 2012 to 2.6% and then decrease to 1.5% in 2014.

In terms of emerging markets the Asia Pacific (excluding Japan), is expecting a decrease in GDP growth from 6.7% in 2012 to 5.8% in 2013. It is forecasted to increase to 6.2% in 2014. Inflation is also expected to decrease from 5.6% in 2012 to 3.7% in 2013 and further decrease to 3.6% in 2014. Export growth is expected to decrease significantly from 8.9% in 2012 to 2.9% in 2013, and then increase to 4.9% in 2014.

For the full Economic Outlook report for May 2013 please click here.

About Atradius
The Atradius Group, a company of Grupo Catalana Occidente S.A., protects businesses against trade credit risks throughout the world with credit insurance, bonding, and collections services offered in 45 countries. With total revenue of EUR 1,554 million and a market share of approximately 31% of the global trade credit insurance market, Atradius’ products contribute to the growth of companies throughout the world by protecting them from the payment risks associated with selling products and services on credit. With 160 offices, Atradius has access to credit information on more than 100 million companies worldwide and makes around twenty thousand trade credit limit decisions daily.

Atradius Credit Insurance N.V. 

Level 5, 22 Pitt Street

Sydney NSW 2000

Ph: +61 (0) 2 9201 5222

E: info.au@atradius.com

W: www.atradius.com

Kelly + Partners: The changing landscape of international tax

Kelly + Partners

Tax Consulting

Level 4/73 Walker Street

North Sydney

Ph: 02 9923 0800

E: info@kellypartners.com.au

W: www.kellypartners.com.au

The proposed new transfer pricing legislation and International Dealings Schedule (IDS) signals the start of a new era for businesses with cross-border transactions. We expect to see an increase in disputes with the ATO, in particular, in businesses with related party funding arrangements and restructures, and businesses experiencing low profitability or losses. These risks are increased by the action plan of the OECD in relation to multinationals' base erosion and profit shifting (BEPS). This focus on transfer pricing globally is partly lead by the Australian Government and signals governments’ willingness to review and update tax policies, tax authorities' greater compliance activities and an increased scrutiny of multinational business’ cross-border tax arrangements.

Recent changes in Australia

On 13 February 2013, the Government introduced into Parliament tax law amendments that seek to re-engineer the transfer pricing law for international business transactions and to adjust the income tax general anti-avoidance rule. The proposed new transfer pricing rules make several changes to the transfer pricing rules, but there are three features that stand out:

• the Bill focuses on arm's length behaviour and conditions, not just transactional pricing;
• the ATO has new broad powers that enable it to replace actual arrangements with deemed arm's length conditions, to potentially reconstruct or unwind transactions;
• a self-assessment regime has been introduced for businesses but with stronger documentation requirements, including that businesses without contemporaneous documentation will not have a Reasonably Arguable Position (RAP), with tax penalty risks.

Further, last year the Australian Taxation Office (“ATO”) released its new International Dealings Schedule 2012 (“IDS-2012”) for all taxpayers, after trial running it with large businesses. The IDS-2012 is a new transfer pricing disclosure form that will be part of the 2012 income tax return, replacing the Schedule 25A form, thin capitalisation disclosure schedule and the Financial Services International Dealings Schedule 2011 that were previously required to be submitted along with the annual income tax return.

Australian companies, partnerships or trusts that have an aggregate amount of transactions or dealings with international related parties that is greater than $2 million will be required to complete the new IDS. In respect of transfer pricing, IDS-2012 requires taxpayers to provide more detailed disclosures of their international dealings than in previous years. It also requires the taxpayer to reveal the main transfer pricing method that is applied to each transaction, along with a disclosure as to the level of specific transfer pricing documentation held for that particular transaction or dealing. Thus the level of compliance required to complete the new IDS-2012 has risen significantly.

What does this mean for taxpayers?

The additional information provided by taxpayers in the IDS 2012 will enable the ATO to better assess the transfer pricing risk of each taxpayer and will allow the ATO to profile high risk transactions. Based on the additional data captured, we expect that the ATO will be performing increased data matching that will allow it to undertake more targeted and focused compliance activities.

Taxpayers should be preparing to update transfer pricing policies and documentation to meet the new legislative requirements. As a minimum, they should review the scope and quality of transfer pricing documentation, and the terms and conditions of all cross-border arrangements.

The international tax landscape is changing rapidly, not only here in Australia, but globally. It is critical that you stay informed of the important and far-reaching changes that are occurring in each jurisdiction as these may have a significant impact on your business’ cross-border transactions and international operations.

Australia’s National Food Plan: Tapping Into Asia’s Expansion

Cynthia Dearin

Dearin & Associates

W: dearinassociates.com 

Tel: +612 8003 7583

info@dearinassociates.com

• Will your business be affected by the new National Food Plan?
• Are cheap imports of fresh food affecting your competitiveness?
• Did you know that you may be eligible to apply for financial assistance through grants under the new National Food Plan?
• What do you see as the big issues for Australian food producers and would you like to have your voice heard?

The Federal Government has said it will help Australia’s food industry target Asia as part of its “National Food Plan” to grow the sector.

On 25 May, the Minister for Agriculture, Fisheries and Forestry released the National Food Plan, spelling out the Government’s intentions for Australia’s food industry. Based on the objectives outlined in the Australia in the Asian Century White Paper, the Plan has a strong focus on Asia and assisting Australian industry to tap into the needs of an expanding Asian middle class.

The plan also aims to help Australian industry increase exports and support a thriving food industry while ensuring Australia’s food needs are met sustainably. It sets out 16 goals in four categories – “Growing Exports”, “Thriving Industry”, “Sustainable Food” and “People” – to be reached by 2025.

What does the National Food Plan mean for business?

Under the Plan, the Government will provide about $40 million worth of funding, mostly to strengthen Australia’s position as a quality food producer for Asia.

The plan includes a $1.5 million small grants program for community food groups. Applicants will be able to apply for Federal Government grants of up to $25,000 to support projects such as farmers’ markets and “food rescue activities”, while grants of up to $10,000 will be available to people involved in smaller initiatives such as community gardens and city farms.

The Plan also sets up a Productivity Commission inquiry into cutting red tape for food manufacturing.

How has the business community reacted to the Plan?

Public reaction to the Plan has been mixed.

The Australian Made Campaign has welcomed the National Food Plan and its focus on exporting into Asia, and stressed the importance of branding Australian products in Asian marketplaces.

The National Farmers’ Federation has described the Plan as a positive step and welcomed the $28.5 million worth of grants to investigate Asian food markets.

Ausveg, Australia’s peak body for vegetable growers, has welcomed $2 million to strengthen the Australian brand in Asia, but says that doesn’t help producers compete with cheap imports.

Spokesman William Churchill says $908 million worth of fruit and vegetables were imported last year, and country of origin labelling isn’t addressed in the food plan.

Robert Pekin is the Executive Director of the Food Connect Foundation and has been heavily involved in developing community supported agriculture.

He says the plan ignores some big issues facing Australian food producers.

“It hasn’t addressed the real issues in the food system… around farmer debt, the number of farmers leaving the land, anti competitiveness in the retail sector. Or some of the huge issues coming down the road in terms of energy constraints, water constraints and financial constraints at the global level which are big issues for Australian agriculture,” Mr Pekin said.

How can Dearin & Associates help you engage with the National Food Plan?

Dearin & Associates can help your business bring its perspectives and priorities to the attention of leaders in government.

If your business will be affected by the National Food Plan, particularly in light of Australia’s developing relationship with Asia, we can help you engage with the relevant government officials, assist in the preparation of submissions to government and connect you directly with the key people. We particularly encourage small and medium enterprises in emerging sectors to consider engaging in this process to ensure that their views and concerns are not drowned out by bigger companies in traditional sectors.

We can also assist your business or association to apply for the grants available under the Plan.

To talk to us about the various ways in which we can assist your business or industry group to work with government, contact us at (02) 8003 75 83 or at info@dearinassociates.com.

Sources

Best, Dean. “AUS: Canberra targets Asia in “national food plan””. Just-food. (http://www.just-food.com/news/canberra-targets-asia-in-national-food-plan_id123345.aspx).

Department of Agriculture, National Food Plan. 25 May 2013. (http://www.daff.gov.au/nationalfoodplan).

Lindberg, Rebecca and Lawrence, Mark. “National Food Plan: most Australians are food secure, but can we do more?”. The Conversation. 29 May 2013. (http://theconversation.com/national-food-plan-most-australians-are-food-secure-but-can-we-do-more-14682#comments).

Locke, Sarina. “Opposition says National Food Plan is a “con job””. ABC Rural. 29 May 2013.

(http://www.abc.net.au/news/2013-05-29/opposition-food-plan/4719736).

Rose, Nicholas and Croft, Michael. “The draft National Food Plan: putting corporate hunger first”. 20 July 2012. The Conversation. (http://theconversation.com/the-draft-national-food-plan-putting-corporate-hunger-first-8342).

Wilson, Cameron. “National Food Plan”. Radio National. 27 May 2013. (http://www.abc.net.au/radionational/programs/bushtelegraph/national-food-plan/4715298).

DHL Export Barometer Results: Aussie exporters cope with the high dollar, but feeling the heat

Author: Tim Harcourt
JW Nevile Fellow in Economics & Professor,
UNSW & The Airport Economist

Australian exporters are learning to live with a high dollar but are feeling the intensity of international business competition. The power of proximity is also replacing the tyranny of distance as Australian exporters focus their activities on the Asian Pacific with China and South East Asia leading the charge. That’s the key finding of the 2013 DHL Export Barometer released this month after a comprehensive survey of close to 700  Australian export businesses.

Export confidence was maintained from 2012 when businesses recovered from a GFC ravaged world economy. 58 per cent of exporters anticipate orders will increase, which is just a shade higher than last year’s forecast. Exporters have successfully ridden out the sub-prime storm. But there are competitiveness pressures, as just under half (48 per cent) of exporters expect an increase in profits. Similarly Australia’s exporter labour market remains tight with 58 per cent of exporters expecting to pay a wage increase over the next 12 months.

Australian exporters are still looking to the big three engines of growth in Asia – China, India and ASEAN. But New Zealand and the Middle East are also resilient. 34 per cent of exporters say they focus on a range of markets as a ‘hedge’ to manage fluctuations in the exchange rate but they are focusing their energies regionally.

The Australian dollar is still adversely affecting most exporters; but they are using a range of approaches to deal with exchange rate related competitiveness pressures. Most of them have become importers – around 74 per cent of exporters now import (compared to around a third 10 years ago) and become enmeshed with supply chains. Very few exporters hedge – around 19 per cent – and only 13 per cent think it is an effective method of dealing with exchange rates. A majority look to different markets but only 10 per cent think that is effective given the strength of the dollar across the board.

Despite the online revolution in the retail sector (which is mainly imported consumer items) only 38 per cent of exporters sell online. We may well see a quiet revolution now in online exporting following the trend in importing so far.

To view the a summary of the 2013 DHL Australia Export Barometer report, please click here.