Economy of Australia

Economy of Australia

Change in Australian GDP (red) and consumer price index (blue), 1970-2006. Source Reserve Bank of Australia
Currency	Australian Dollar ($A or A$, AU$ or $AU, AUD)
Fiscal year	1 July - 30 June
Trade organisations	APEC, WTO and OECD
Statistics
GDP	$645.3 billion (2006 est.)
GDP growth	3.8% (Q2 2007) [1]
GDP per capita	$32,900 (2006 est.)
GDP by sector	agriculture: 3.8% industry: 26.2% services: 70% (2005 est.)
Inflation (CPI)	2.1% (Q2 2007) [2]
Population below poverty line	NA%
Gini coefficient	30.5 (2000) [3]
Labour force	100.66 million (2006 est.)
Labour force by occupation	agriculture (3.6%), mining (1.1%), industry (20.2%), services (75.1%) (May 2005 est.)
Unemployment	4.3% (Q2 2007) [4]
Main industries	mining, industrial and transportation equipment, food processing, chemicals, steel
External
Exports	$117 billion (2006 est.)
Export goods	coal, gold, meat, wool, alumina, iron ore, wheat, machinery and transport equipment
Main export partners	Japan 20.3%, China 11.5%, South Korea 7.9%, US 6.7%, New Zealand 6.5%, India 5% (2005)
Imports	$127.7 billion (2006 est.)
Import goods	machinery and transport equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products
Main import partners	US 13.9%, China 13.7%, Japan 11%, Singapore 5.6%, Germany 5.6% (2005)
Public finances
Government debt	$585.1 billion (30 June 2006 est.)
Revenues	A$222.9 billion (2005-2006) [5]
Expenses	A$206.0 billion (2005-2006) [6]
Economic aid	donor: ODA, $2.5 billion (2005/06 Budget) [7]
All values, unless otherwise stated, are in US dollars.

Throughout this article, the unqualified term "dollar" and the $ symbol refer to the Australian dollar. However, figures in the sidebar are in US dollars.

The Economy of Australia is a prosperous, Western-style market economy dominated by its services sector (68% of GDP), though the agricultural and mining sectors (4.7% of GDP combined ) account for 65% of its exports. Rich in natural resources, Australia is a major exporter of agricultural products, particularly grains and wool, and minerals, including various metals, coal, and natural gas. Australia occupies a continent close to the size of the contiguous United States, and has a labour force of only about ten million, less than that of New York City. Service industries have expanded in recent decades at the expense of the manufacturing sector, which now accounts for just under 12 per cent of GDP.

Australia's emphasis on reforms is often cited as a key factor behind the continuing strength of the economy. In the 1980s, the Australian Labor Party, led by Prime Minister Bob Hawke and Treasurer Paul Keating, commenced the modernisation of the Australian economy by floating the Australian dollar in 1983, leading to full financial deregulation.

Current areas of concern to economists include Australia's large current account deficit, the absence of a successful export-oriented manufacturing industry, a real estate bubble, and high levels of net foreign debt owed by the private sector.

History

Main article: Economic history of Australia

Taxation

As a Federation, political power is spread between the Commonwealth and State Governments. As a result, both the Commonwealth and the States have their own taxes. Taxes vary from State to State due to their different needs, populations, economics and budgetary position. The Commonwealth is the main source of income for State Governments, however. The Commonwealth's largest sources of revenue are income tax and business tax. As a result of State dependence on Federal taxation revenue to meet decentralised expenditure responsibilities, Australia is said to suffer from a vertical fiscal imbalance.

State taxation

States also have their own taxes so that they can fund the services they offer. For obvious reasons, tax rates vary from State/Territory to State/Territory. Certain States and Territories may not even levy certain taxes. State taxes commonly include a Payroll Tax, levied on businesses, a Poker Machine Tax, levied on businesses who offer gambling services, a Land Tax, levied on people and businesses who own land and most significantly, Stamp Duty, levied on sales of land (in every State) and other items (chattels in some States, unlisted shares in others, and even sales of contracts in some states).

By agreement with the Commonwealth, the Australian States ceded the right to levy income tax during WWII. Whilst there is probably no legal obstacle to their resuming income taxation, it would be politically extremely difficult.

Municipal taxation

Local Governments, or, as they are called in Australia, councils, have their own taxes so that they can provide rubbish collection, park maintenance services, libraries and museums, etc. This taxation is commonly referred to as "council rates".

Trade and economic performance

Australian exports in 2006

In the second half of the twentieth century, Australian trade shifted decisively away from Europe and North America to Japan and other East Asian markets.

Despite high global demand for Australian mineral commodities, export growth has remained flat in comparison to strong import growth. Even though Australia enjoys high commodity prices, economists have warned that structural change is needed in order to increase the size of manufacturing sector. The Australian economy has been performing nominally better than other economies of the OECD and has supported economic growth for 16 consecutive years. According to the Reserve Bank of Australia, Australian per capita GDP growth is higher than that of New Zealand, US, Canada and The Netherlands. The performance of the Australian economy is heavily dependent on US and Chinese economic growth.

See also

• Reserve Bank of Australia
• Australia's Balance of Payments
• Economy of Oceania
• The New South Wales Economy

References

• Macfarlane, I. J. (1998). "Australian Monetary Policy in the Last Quarter of the Twentieth Century". Reserve Bank of Australia Bulletin, October 1998 (Adobe Acrobat *.PDF document)
• Parham, Dean. (2002). "Microeconomic reforms and the revival in Australia’s growth in productivity and living standards". Assistant Commissioner - Productivity Commission, Canberra Conference of Economists Adelaide, 1 October, 2002 (Adobe Acrobat *.PDF document) - document not found
• Some statistics on this page have been drawn from publications of the Australian Bureau of Statistics.
• OCED Factbook 2006 (Gini coeffients) OCED Factbook 2006 pdf

External links

• Australia page @ Organisation for Economic Co-Operation & Development (OECD)
• Economic Survey of Australia @ OECD
• Monthly Economic and Social Indicators (Australian Parliamentary Library)
• Quick Reference Tables for the World Bank's 2005 data
• Harcourt, Tim. (2005). "Introducing the twenty five billion dollar man: how the LNG deal was won". Chief Economist - Australian Trade Commission - Sydney - 26 March 2003
• Template:CIA WFB 2005
• - "Australian Country Information" @ the Australian Department of Foreign Affairs & Trade
• Invest in Australia