Euromonitor International 09 March 2012
Australia is a stable and fast growing economy. It ranks highly in the global competitiveness index 2012. FDI inflows and outflows are both rising. Information and communications technology (ICT) penetration is high and its infrastructure is solid. Total taxes are high but do not take long to pay. Skills shortages and an ageing population remain an issue, though unemployment is low and per capita consumer expenditure is growing.
Australia ranked highly in the Ease of Doing Business Report 2012 (‘Doing Business’), at 15th out of 183 countries. Total GDP growth in 2010-11 was 1.8% in real terms. Since 2007 when Australia had a budget surplus, the government has accrued a budget deficit totaling A$56.9 billion (US$55.5 billion) in 2011, which amounted to 3.9% of its total GDP. Both FDI inflows and outflows increased in 2010. Australia has a well-developed infrastructure, ranking 24th out of 142 countries for its infrastructure in the Global Competiveness Index (GCI) 2011. The total tax rate as a percentage of total company profits was high at 47.7%, compared to the OECD average of 42.7% according to Doing Business 2012. Australia has a high degree of information and computer technology usage, ranking 17th out of 138 countries in the Networked Readiness Index (NRI) in 2011. Total expenditure on Research & Development (R&D) as a percentage of GDP in 2011 was quite high, at 2.3% of GDP. Australia has an educated population: 99.9% of adults (those aged 15+) were literate in 2011, but suffers from skills shortages. The total unemployment rate was low, at 5.1% in 2011. Wage costs are high in comparison to geographically proximate countries: the average hourly wage in manufacturing in 2011 in Australia was US$31.6 compared to the OECD average of US$20.4. Australia saw per capita consumer expenditure rise from A$32,871 (US$30,153) in 2010 to A$34,052 (US$34,880) in 2011. Its population is ageing which could limit consumer and labour market growth in the future; in 2011 pensioners (those aged 65+ in 2011) comprised 14.4% of the population, up from 14.1% in 2006.
Australia ranks higher than the OECD average in the Doing Business Report 2012 Australia ranked very highly in the Corruption Perceptions Index 2010, at eighth out of 178 countries. Australia ranked highly in the Ease of Doing Business Report 2012 (‘Doing Business 2012’), at 15th out of 183 countries. This was a drop of four places from 2011, when its ranking was 11th out of 183 countries. In Doing Business 2012, Australia scored lower than its neighbour New Zealand, which ranked in third place. However, it scored higher than the average ranking of OECD countries (29). Australia’s slightly lower ranking in Doing Business 2012 compared to 2011 was due to it scoring slightly worse in seven out of the 10 components of its overall Doing Business ranking. Its rankings for protecting investors and resolving insolvency dropped the most between Doing Business 2011 and 2012, with both falling by five places. Australia stands out as performing well for starting a business: it ranked second out of 183 countries in Doing Business 2012. Part of the reason for its high score was that according to Doing Business 2012, an average of just 2 days were needed to register a business in Australia compared to the OECD average of 13.0 days. Australia’s poorest ranking for Doing Business 2012 was for protecting investors (65th place), in stark contrast to New Zealand (first place). Australia’s poor ranking in this area was primarily due to a lack of transparency as companies are under fewer legal obligations to publically disclose their transactions, in comparison with other economies. Australia weathered the global economic crisis better than many other economies, and business confidence in the country in 2012 is high. It has a stable political environment, and is also rich in natural...