Australia’s Economy: A Brief Look

Australia

For over 25 years the Australia economy has recorded remarkable economic progress seemingly unaffected by recession. The economy has enjoyed the assistance of its efficient government system and its excellent legal system and independent bureaucracy along with an abundance of natural resources such as coal, and iron ore – these helped create a healthy economy such as Australia’s.

Australia proves to be an enticing place for investment for its available workforce and most industries open to foreign competition. The Australian government has removed itself from most of the areas in the market and there is a growing number of competitions in the many different sectors like financial services. Regardless of government debt going up since the global financial crisis, compared to other economies of the same level it is considerably lower.

Benefiting from over two decades of economic expansion, Australia is one of the richest nations in the Asia-Pacific region. The global recession in 2009 barely did anything to it but the Labor government at the time spent a significant amount of stimulus spending and generated a deficit in Australia economy. This deficit is still persisting under succeeding Liberal governments.

Rule of Law

There is a firm rule of law set in place in order to protect property rights and mitigate corruption. Expropriation is a rarity and enforcement of contracts is strong. Australia’s government is all for transparency and a strong legal system with an autonomous bureaucracy. Its judiciary also operates on its own and is neutral when it comes to cases.

Regulation

Regulation in Australia is very transparent and efficient and favors entrepreneurship. Only three steps are needed to start a business. There is a strong support for the labor market by the modern and flexible employment code.

Trading

There is a certain importance put on trading as it makes up about 41 percent of Australia’s GDP due to import and exports alone. The tariff rate on average is around 1.9 percent.

Industries

Manufacturing

As of 2007, manufacturing contributes to around 12 percent of Australia’s GDP.

Mining

Mining, particularly coal mining is mostly located in Queensland, New South Wales and Victoria and about 54 percent of the coal mined is exported.

Agriculture

Agriculture makes up around 3 percent of Australia’s GDP – 12 percent if it includes the value-added processing that is done outside the farm. Australia exports 60 percent of its farm products.

Tourism

Tourism made up about 2.5 percent of the GDP of Australia in the years 2010 and 2011.

Media

Australia with its two largest media companies Fairfax Media and News Corporation was in rank 30 out of the 179 countries in accordance to press freedom in 2011 to 2012.

Finance

As of April 2012, Australia’s “Big Four” (National Australia Bank, Commonwealth Bank, Australia and New Zealand Banking Group, and Westpac) was included in the “World’s 50 Safest Banks”.