Economy of Australia

The economy of Australia is a prosperous Western-style capitalist economy, with a per capita GDP at the level of the four dominant West European economies; its developed market economy is dominated by its services sector (65% of GDP), yet it is the agricultural and mining sectors (7% of GDP combined) that account for the bulk (58%) of Australia's goods and services exports. Rich in natural resources, Australia is a major exporter of agricultural products, minerals, metals, and fossil fuels. Commodities account for 57% of the value of total exports, so that a downturn in world commodity prices can have a big impact on the economy. The government is pushing for increased exports of manufactured goods, but competition in international markets continues to be severe. Australia's comparative advantage in primary products is a reflection of the natural wealth of the Australian Continent and its small domestic market; 20.3 million people occupy a continent the size of the contiguous United States. The relative size of the manufacturing sector has been declining for several decades, and now accounts for just under 12 percent of GDP.

Australia commenced a basic reorientation of its economy in the early 1980s and has transformed itself from an inward looking, import-substitution country to an internationally competitive, export-oriented one. Australia's emphasis on reforms is key factor behind the economy's strength. In the 1980s, the Australian Labor Party, led by Prime Minister Bob Hawke and Treasurer Paul Keating, commenced the modernisation of the Australlian economy by floating the Australian dollar in 1983, leading to full financial deregulation.

Other key reforms include unilaterally reducing high tariffs and other protective barriers; floating the Australian dollar exchange rate; deregulating the financial services sector-- including a decision in late 1992 to allow liberal access for foreign bank branches; rationalizing and reducing the number of trade unions; efforts to restructure the highly centralized system of industrial relations and labour bargaining; better integrating the State economies into a national federal system; improving and standardizing the national infrastructure; and privatizing many government-owned services and public utilities.

Since 1996, the Coalition government, led by Prime Minister John Howard, continued to implement microeconomic reform policies. The microeconomic reforms of the Howard government have focussed on the labour market, and has attempted to reduce union power and involvement in the workplace. The Coalition government deregulated numerous other industries, including the telecommunications sector, and privatised many of the pre-existing monopolies. Since the recession of the early 1990s, the Australian economy has not suffered a recession in over 13 years. As of October 2004, unemployment had fallen to a level of 5.2 per cent, the lowest level since the late 1970s. The price of shares listed on the Australian Stock Exchange has also grown significantly since the early 1990s.

Many raw materials (including resources postulated to exist but yet to be discovered) remain mostly unexploited. Economists often refer to Australia as the "world's farm". The agriculture and natural resources sectors contribute significantly to GDP, both directly and indirectly, through associated services like road and rail transport networks, which in some areas exist entirely based on an industrial need, and supporting rural economies. In recent years the Australian government has been focusing on the development of the tourism, education and technology markets. The Australian government funds scientific research and development through universities, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), and through joint ventures between the public and private sectors called Cooperative Research Centres.

The ultimate goal is for Australia to become a competitive producer and exporter, not just of traditional farm and mineral commodities, but of a diversified mix of value added manufactured products, services, and technologies. While progress has been made on this economic reform agenda--such as in opening the telecommunications market to competition--much remains to be done, particularly in the domestic arena.

While the near-term outlook is for continued economic expansion, Australia's longer term prospects depend heavily on continued fundamental economic reform. There is a general consensus among the major political parties, management, and labour on the necessary features of this reform but significant divergence of views on the methods, pace, and degree of change required.

Statistics

GDP: purchasing power parity - $571.4 billion (2004 est.)

GDP - real growth rate: 3% (2004 est.) <p>GDP - per capita: purchasing power parity - $29,000 (2004 est.) <p>GDP - composition by sector:
agriculture: 3.5%
industry: 26.3%
services: 70.2% (2004 est.) <p>Population below poverty line: NA% <p>Household income or consumption by percentage share:
lowest 10%: 2%
highest 10%: 25.4% (1994) <p>Inflation rate (consumer prices): 2.8% (2004 est.) <p>Labour force: 10.19 million (2004 est.) <p>Labour force - by occupation: services 73%, industry 22%, agriculture 5% (1997 est.) <p>Unemployment rate: 6% (2004 est.) <p>Budget:
revenues: $185 billion
expenditures: $181 billion, including capital expenditures of NA (2004 est.) <p>Industries: mining, industrial and transportation equipment, food processing, chemicals, steel <p>Industrial production growth rate: -0.1% (2004 est.) <p>Electricity - production: 198.2 billion kWh (2001) <p>Electricity - production by source:
fossil fuel: 89.85%
hydro: 8.35%
nuclear: 0%
other: 1.8% (1998) <p>Electricity - consumption: 184.4 billion kWh (2001) <p>Electricity - exports: 0 kWh (1998) <p>Electricity - imports: 0 kWh (1998) <p>Agriculture - products: wheat, barley, sugarcane, fruits; cattle, sheep, poultry <p>Exports: $58 billion (f.o.b., 1999 est.) <p>Exports - commodities: coal, gold, meat, wool, aluminum, iron ore, wheat, machinery and transport equipment <p>Exports - partners: Japan 18.1%, US 8.7%, China 8.4%, South Korea 7.4%, New Zealand 7.4%, UK 6.7% (2003) <p>Imports: $82.91 billion (2003 est.) <p>Imports - commodities: machinery and transport equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products <p>Imports - partners: US 16%, Japan 12.5%, China 11%, Germany 6.1%, UK 4.2% (2003) <p>Debt - external: $233.5 billion (2004 est.) <p>Economic aid - donor: ODA, $894 million (FY99/00) <p>Currency: 1 Australian dollar ($A) = 100 cents <p>Exchange rates: Australian dollars per US dollar - 1.5419 (2003), 1.8406 (2002), 1.9334 (2001), 1.7248 (2000), 1.55 (1999), 1.5888 (1998), 1.3439 (1997), 1.2773 (1996), 1.3486 (1995) <p>Fiscal year: 1 July - 30 June

References

• Parham, D. (2002). Microeconomic reforms and the revival in Australia’s growth in productivity and living standards (http://www.pc.gov.au/research/confproc/mrrag/mrrag.pdf). Conference of Economists, Adelaide, 1 October
• Macfarlane, I. J. (1998). Australian Monetary Policy in the Last Quarter of the Twentieth Century (http://www.rba.gov.au/PublicationsAndResearch/Bulletin/bu_oct98/bu_1098_2.pdf). Reserve Bank of Australia Bulletin, October
• Template:CIA WFB 2000
• Some information in this article comes from the 2003 U.S. Department of State website.

See also

• Australia

Template:WTO

Template:South Pacific Applied Geoscience Commissionlb:Economie vun Australien

pt:Economia da Austrália