A stable and competitive economy
Australia has recorded 17 consecutive years of economic growth since 1992 – averaging 3.3 per cent a year.
It has been one of the most stable and productive periods of Australia’s modern history, and places Australia in the top echelon of developed countries in terms of sustained rates of growth.
Australia is forecast to grow again at 2.75 per cent in 2008-09 which is above the average growth rate members of the Organisation of Economic Cooperation and Development (OECD) of 2.2 per cent.
Furthermore, Australia ranks first in the Asia-Pacific region for labour, agricultural and industrial productivity per person employed, according to the IMD World Competitiveness Yearbook.
The 2006 OECD Economic Survey noted that living standards in Australia surpass those of all Group of Eight countries except the United States.
Sound economic management
Australia’s positive outlook is also sustained by its strong fiscal position. A sustained period of Government budget surpluses has enabled the Australian Government and many state level Governments to retire large amounts of Government debt.
Net Government debt was eliminated in 2005-06 making Australia a net creditor nation. In May 2008, the Australian Government committed to a budget surplus equivalent to 1.8 per cent of GDP – some $21.7 billion.
Australia’s independent central bank, the Reserve Bank of Australia (RBA), is responsible for monetary policy, in particular to keep consumer price inflation between two and three percent, on average, over business cycles.
Advanced economic structure
Australia has a sound and practical structure of financial regulations and institutions that provides certainty for business and is open to investment without undue delay. There is a strong, transparent corporate governance system along with business-oriented corporate regulation and insolvency regimes.
Australia also has low barriers to trade and investment. Since a wave of micro-economic reform in the early 1990s, competition policy has been a key ingredient of the economy’s continuing success, including in key areas such as transport, telecommunications, electricity and gas.
According to the World Bank, a new business can be established in Australia within two days compared with an OECD average of 20 days.
The goods and services tax (GST) – Australia’s value-added tax – is levied at 10 per cent and applies to almost all goods and services transactions across the economy. There is no stamp duty on share transactions and a flat corporate tax rate of 30 per cent.
Australia’s long and extensive period of economic growth has stretched its infrastructure capacity to the limit. Recognising the potential capacity restraints resulting from this problem, the Government committed in 2008 to creating an organisation called ‘Infrastructure Australia’ to provide a new, national approach to planning, funding and implementing the nation's future infrastructure needs.
Safe, stable and prosperous, Australia is an increasingly attractive hub for global and regional business operations.
Australia is home to citizens from some 200 countries, making it the most multilingual workforce in the Asia–Pacific region. More than 4 million Australians speak a second language.
Knowledge-based industries
In the last century, it could be strongly argued that Australia’s economic success was based on its abundant agricultural and later mineral and fuels resources. While these sectors are still important, Australia has increasingly become a knowledge-based economy.
Numerous factors have contributed to this development: the pace of technological and social change; advances in transport making travel, and the exchange of ideas, easier; and broader access to higher standards of education.
Information and communications technology (ICT) is a key driver of economic growth, and continuing expansion of ICT infrastructure is essential to keep pace with world standards. Australia’s ICT market is worth an estimated $89 billion with 25 000 companies employing 236 000 IT specialists.
Australia was ranked the third most technology-savvy country in the world in the 2007 Globalisation Index (conducted for Foreign Policy by consulting firm A.T. Kearney).
Financial markets
Australia is a major regional financial centre and a vital cog in the global financial system.
The Australian Stock Exchange and the Sydney Futures Exchange merged in 2006 to form the world’s 8th largest listed exchange – the Australian Securities Exchange (ASX). As at 30 June 2007, the ASX had 2,090 listed companies with a domestic market capitalisation of $1.63 trillion. Every day, some 150 000 equities and 400 000 futures and options are traded.
Australia’s trading day spans the closure of the markets in the United States and the opening of markets in Europe. The ASX also has strong links with the major stock markets of Asia.
Australia has one of the highest percentages of shareholders in the world. More than 50 per cent of the adult population own shares in publicly-listed companies.