Australia

By. Emma Nowaczyk

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Quick Facts

Population: 23.06 million (2013)

  • GDP: $1.56 trillion USD (2013)
  • GDP Growth: 2.4%
  • GDP Per Capita: $43,073
  • Unemployment: 5.6%
  • Inflation: 2.5%
  • FDI Inflow: $49.8 billion
  • Seven Major Sources of Economic Progress

    Legal System

    Australia has a stable political environment with well-established and transparent political processes, a strong legal system, and a professional bureaucracy. Anti-corruption measures are generally effective in discouraging bribery of public officials. Australia’s judicial system operates independently and impartially. Property rights are secure, and enforcement of contracts is reliable. Expropriation is highly unusual

    Competitive Markets

    Australia emerged from the global recession relatively unscathed, but stimulus spending by the previous Labor government generated a fiscal deficit. Australia is internationally competitive in services, technologies, and high-value-added manufactured goods. Mining and agriculture are important sources of exports

    Limits on Government Regulation

    The top individual income tax rate is 45 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax and a capital gains tax. Total tax revenues equal about 27 percent of the domestic economy. A controversial carbon tax has been repealed. Government expenditures equal 35.7 percent of the economy, and public debt is equivalent to less than 30 percent of GDP.

    An Efficient Capital Market

    It takes only one procedure to start a business, and no minimum capital is required. Flexible labor regulations facilitate a dynamic labor market, increasing overall productivity.

    Monetary Stability

    Banking regulations are sensible, and lending practices have been relatively prudent. Monetary stability is well maintained, with inflationary pressures under control. A well-functioning independent judiciary ensures strong protection of property rights, and corruption has been minimal.

    Low Tax Rates

    . Regulatory efficiency remains firmly institutionalized, and well-established open-market policies sustain flexibility, competitiveness, and large flows of trade and investment. In 2014, Australia became the first developed country to repeal a carbon-emissions tax.

    Free Trade

    Australia has a 1.8 percent average tariff rate, and non-tariff barriers are low. Large-scale foreign investments are subject to review. In 2013, the government rejected a takeover of Australia’s GrainCorp by the U.S. firm Archer Daniels Midland.

    Bonus

    *Australia’s economic freedom score is 81.4, making its economy the 4th freest in the 2015 Index.

    *Australia is ranked 4th out of 42 countries in the Asia–Pacific region.