Australia has experienced a period of strong economic expansion over the past 10 years with rates of growth at the upper end of OECD countries. This performance has been supported by low interest rates and low inflation together with significant public sector savings reflected in ongoing budget surpluses. Maintaining these sound macroeconomic settings is important to the ongoing prospects for strong economic growth.
On most measures, Australia is a strong economic performer.
The Australian economy completed its 13th year of expansion in mid 2004 – the longest run of uninterrupted growth since the World War II.
Our GDP/head has improved from a world ranking of 15th in 1994 to 8th in 2004 (purchasing power parity adjusted).
The Australian economy has been ranked 9th globally in overall competitiveness in 2005, and third in the Asia Pacific region.
Our unemployment rate at 5.1 per cent is among the lowest in the OECD, and is the lowest it has been in Australia since 1976.
Further underpinning this performance have been reforms which contained and reduced input costs, increased the competitiveness of firms, provided a more efficient and globally competitive business taxation system and introduced more flexible workplace arrangements. Together with the introduction of new technologies, particularly in IT, the result has been productivity, accelerated and Australia now ranks highly in international comparisons of productivity growth.
Structurally, during this time Australia has become far more integrated into the global economy and in most cases Australian firms compete without special government assistance. The services sector continues to dominate the economy, with strong growth in services exports. The manufacturing sector, although now a relatively smaller contributor to output, has been transformed into a high productivity sector exporting a large portion of its output. The resources and energy sectors remain cornerstones of Australian exports. The general pause in export volume growth experienced since 2000-01 appears now to be passing with recent strong growth in mining exports. Rural exports remain a concern as drought conditions persist over significant parts of south and eastern Australia.
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