Australia has a prosperous, Western-style mixed economy, with a per capita GDP slightly higher than those of the UK, Germany and France. The country was ranked third in the United Nations’ 2005 Human Development Index and sixth in The Economist worldwide quality-of-life index 2005.
In recent years, the Australian economy has been resilient in the face of global economic downturn. Rising output in the domestic economy has been offsetting the global slump, and business and consumer confidence remains robust. Australia’s emphasis on economic reform is often claimed to be key factor behind the economy’s strength. In the 1980s, the Labor Party, led by Prime Minister Bob Hawke and Treasurer Paul Keating, started the process of economic reform by floating the Australian dollar in 1983, and deregulating the financial system.
Since 1996, the Howard government has continued the process of micro-economic reform, including the partial deregulation of the labour market and the privatisation of state-owned businesses, most notably in the telecommunications industry.
Substantial reform of the indirect tax system was implemented in July 2000 with the introduction of a 10% Goods and Services Tax, which has slightly reduced the heavy reliance on personal and company income tax that still characterises Australia’s tax system.
The Australian economy has not suffered a recession since the early 1990s. As of July 2005, unemployment was 5.0% with 10,030,300 persons employed.
The service sector of the economy, including tourism, education, and financial services, comprises 69% of GDP.Agriculture and natural-resources represent only 3% and 5% of GDP, respectively, but contribute substantially to Australia’s export performance. Australia’s largest export markets include Japan, China, the United States, South Korea and New Zealand.
Areas of concern to some economists include the chronically high current account deficit and also high levels of net foreign debt.