Introduction

Australia has a resilient economy and provides excellent business and investment opportunities. It is currently in its 25th year of uninterrupted annual growth supported by high productivity levels, with 15 out of 20 industries rating above the global average. The Australian economy is rated AAA by all three global rating agencies and is forecast to realise average annual real GDP growth of 2.9 percent between 2016 and 2020. Australia is home to the largest pool of funds under management in the Asian region and therefore serves as an important contributor to five sectors expected to drive future global growth: agribusiness, education, tourism, mining and wealth management. Australia therefore provides both a safe, low-risk economic environment in which to do business.

Australia has one of the most well-regulated business environments in the world. Together with political stability and a predicable regulatory framework, Australia offers investors both confidence and security. To have a better knowledge of how the business environment is regulated, we must firstly acquire a better understanding of the Australian legal system.

Legal System

The Commonwealth of Australia prides itself on having a robust and stable economy with a federal system of government based on the United Kingdom's Westminster system which is comprised of a three-tiered government：

• Federal government: The Commonwealth of Australia bears responsibility for national matters, including trade, foreign policy and taxation.

• State/Territory governments: The Commonwealth of Australia comprises six States（New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia）and two Territories（the Northern Territory and Australian Capital Territory）, each of which has certain powers to make laws applicable to that State or Territory in regards to peace, order and good government. Such power is, however, limited to operate within the borders of the state or territory. Moreover, states and territories have also agreed to forfeit certain powers to the federal government.

• Local government: Local councils have responsibility for local planning and development processes and for the provision of certain services to the local community.

The two main political parties, both broadly pro-business, are the Australian Labour Party and the Liberal Party of Australia（in a long-standing coalition with the National Party of Australia）. Australia has a written constitution founded on a separation of powers between the legislative, executive and judicial branches of government. The legislature has the power to propose and make laws. The executive, the members of which are drawn from the legislature, administers the law. The judiciary interprets and applies the law. It develops the law through judicial precedent. Members of the judiciary are appointed by the executive.

When doing business in Australia, it is important to recognise the existence of, and interrelation between, laws and regulations of Commonwealth, State and Territory and local government as well as the common law.

Australia has a tiered court system: Commonwealth Courts, State and Territories Courts and Norfolk Island Courts. It must be noted that the courts in each system have specifically defined powers to hear cases brought before them and, depending on the nature of the case, to make and enforce judgements. The courts in each system are hierarchical. Please see the simplified table（Table 1）below：

For a more detailed overview of the Australian court hierarchy, see Table 2：

Commonwealth courts have jurisdiction over cases arising throughout Australia involving federal law while the state and territory courts have jurisdiction over cases which are sufficiently connected to their state or territory and which involve application of their state and territory law. Where a case should be initiated therefore depends on the law in question, the legal area involved as well as the amount involved. The county or district courts have jurisdiction in various civil cases, or in which the amount claimed is less than AUD 200,000 while the lower courts（Magistrates Courts or Court of Petty Sessions）have the power to hear particular civil matters that involve limited claims—often AUD 40-100,000）.

Civil proceedings should always be instituted in the lowest court, this often being the Magistrates Courts or Court of Petty Sessions.

Australia belongs to the common law tradition. There are thus two sources of law in Australia: legislation（acts or statutes）and case law.

While criminal law has some relevance to trade and investment, it is civil law that is mainly relevant. Civil law includes contract law, tort, agency, consumer protection, corporation law as well as property law. Statutory law is supplemented by judge-made common law. Judge-made law is found in judicial decisions and takes effect within the doctrine of binding judicial precedent. This means that in the areas of law relevant to trade and investment there is not only governing legislation but also case law.

Legislation relevant to investment and trade is as follows：

a）The Competition and Consumer Act 2010（Cth）—the Australian Consumer Law is found in schedule 2 of this act.

Additionally the states and territories may have their own laws which are

only applicable within the state or territory. For instance, the Goods Act 1958（Vic）governs the sale of goods within the state of Victoria. Similarly, other states have their own sale of goods legislation.

b）Fair trading is regulated at state level by the Frustrated Contracts Act 1978（NSW）, the Frustrated Contracts Act 1988（SA）and the Australian Consumer law and Fair Trading Act 2012（Vic）.

c）Australian Trade and Investment Commission Act 1985（Cth）—applicable on the whole of Australia.

d）Some of the principles of tort law are implemented at state level—the Wrongs Act 1958（Vic）, The Civil Liability Act 2002（NSW）, The Civil Liability Act 2003（QLD）, The Civil Liability Act 1936（SA）etc.

e）Import is governed at federal level by the Customs Act 1901（Cth）as well as the Customs Tariff Act 1995（Cth）.

f）Intellectual Property law is governed by the Patents Act 1990（Cth）, the Trademarks Act 1995（Cth）and the Copyright Act 1968（Cth）.

g）Foreign investment is regulated by the Foreign Acquisitions and Takeovers Act 1975（Cth）.

h）Australia is party to a number of trade agreements. For a list of trade agreements Australia is party to, see：

http://dfat.gov.au/trade/agreements/Pages/status-of-fta-negotiations.aspx.

All relevant legislation is accessible via: http://www.austlii.edu.au/.