Prehistoric settlers arrived on the continent from Southeast Asia at least 40,000 years before the first Europeans began exploration in the 17th century. No formal territorial claims were made until 1770, when Capt. James COOK took possession of the east coast in the name of Great Britain (all of Australia was claimed as British territory in 1829 with the creation of the colony of Western Australia). Six colonies were created in the late 18th and 19th centuries; they federated and became the Commonwealth of Australia in 1901. The new country took advantage of its natural resources to rapidly develop agricultural and manufacturing industries and to make a major contribution to the Allied effort in World Wars I and II.
Oceania, continent between the Indian Ocean and the South Pacific Ocean
bauxite, coal, iron ore, copper, tin, gold, silver, uranium, nickel, tungsten, rare earth elements, mineral sands, lead, zinc, diamonds, natural gas, petroleum
Population - distribution
English 76.8%, Mandarin 1.6%, Italian 1.4%, Arabic 1.3%, Greek 1.2%, Cantonese 1.2%, Vietnamese 1.1%, other 10.4%, unspecified 5% (2011 est.)
Sydney 4.505 million; Melbourne 4.203 million; Brisbane 2.202 million; Perth 1.861 million; Adelaide 1.256 million; CANBERRA (capital) 423,000 (2015)
- Conventional long form
- Commonwealth of Australia
- Conventional short form
- Local long form
- Local short form
parliamentary democracy (Federal Parliament) under a constitutional monarchy; a Commonwealth realm
- Geographic coordinates
- 35 16 S, 149 08 E
- Time difference
- UTC+10 (15 hours ahead of Washington, DC, during Standard Time)
- Daylight saving time
- +1hr, begins first Sunday in October; ends first Sunday in April
accepts compulsory ICJ jurisdiction with reservations; accepts ICCt jurisdiction
Following two decades of continuous growth, low unemployment, contained inflation, very low public debt, and a strong and stable financial system, Australia enters 2017 facing a range of growth constraints, principally driven by the sharp fall in global prices of key export commodities. Demand for resources and energy from Asia and especially China has stalled and sharp drops in current prices have impacted growth.
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -32,893,071,299
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 253,978,763,686
- Exports of goods and services
- US$ 227,285,035,702
- Total Merchandise Trade
- FDI, net inflows
- US$ 41,951,351,112
- Commercial Service Exports
- US$ 52,446,709,389
wheat, barley, sugarcane, fruits; cattle, sheep, poultry
mining, industrial and transportation equipment, food processing, chemicals, steel
- coal, iron ore, gold, meat, wool, alumina, wheat, machinery and transport equipment
- China 32.2%, Japan 15.9%, South Korea 7.1%, US 5.4%, India 4.2% (2015)
- machinery and transport equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products
- China 23%, US 11.2%, Japan 7.4%, South Korea 5.5%, Thailand 5.1%, Germany 4.6% (2015)
- Country Risk Rating
- The political and economic situation is good. A basically stable and efficient business environment nonetheless leaves room for improvement. Corporate default probability is low on average.
- Business Climate Rating
- The business environment is very good. Corporate financial information is available and reliable. Debt collection is efficient. Institutional quality is very good. Intercompany transactions run smoothly in environments rated A1.
- Geographic proximity to emerging Asia
- Mining resources
- Moderate public debt
- Specific geographic features which favor tourism
- Vulnerable to commodities cycle (specifically iron ore and coal) and Chinese demand
- Substantial household debt (185% of gross disposable income)
- Shortage of skilled labor
- Highly exposed to natural hazards
- Wide disparities between federated States
Activity is expected to accelerate slightly in 2017. The transition of the economic model will give an impetus to growth by reducing the impact of the Chinese slowdown and the worsening trade terms which affected it in 2016: following the mining boom, the country has been working to diversify its economy in order to offset the fall in mining income. The services sectors (notably tourism and education), as well as the sectors strong in research and development will experience strong investment growth. Residential investment is also likely to continue, thus stimulating the construction sector.
Meanwhile, slower demand from China for iron ore and coal will be partially offset by more intensive exploitation of other commodities and by expansion of the services sector. Private consumption is expected to continue to sustain activity because of the low unemployment rate and the steady rise in property prices. The central bank's accommodative monetary policy (key rate of 1.5%) will also support private consumption despite and already considerable level of household debt (185% of gross disposable income).
Slightly above the central bank target (2%), inflation is expected to rise gradually insofar as certain factors allowing inflationary tensions to be contained are starting to weaken, in particular slower wage rises, the modest oil price recovery and more intense competition on the distribution market in the past.
The risk of a stronger than expected economic downturn in China (Australia's leading trading partner accounting for one third of exports) could hit activity. Nevertheless, the country has room for maneuver on fiscal and monetary policy.
The fiscal consolidation sought by the former prime minister is no longer a priority. Indeed, Prime Minister Turnbull wants to adopt a pro-business policy by lowering taxes and allocating AUD 1.1 billion (0.1% of GDP) to innovation and entrepreneurship. Meanwhile, security issues featured strongly in the debates during the last general elections. The government is, accordingly, planning to invest USD 30 billion in defense over the next 10 years. So, the public deficit is expected to continue to rise, while remaining at a relatively low level compared with other OECD countries.
The current account deficit is expected to narrow slightly, taking into account higher exports of copper and liquefied natural gas, which benefited from the previous depreciation of the Australian dollar. Exports of services also contributed to an improvement in the current account deficit, thus offsetting the rise in imports triggered by private consumption.
Australia is still heavily dependent on Chinese demand (notably for iron and coal, the two leading exports) despite starting to adapt its economic model, a change which could, however, benefit from Asian demand to diversify its exports.
Following a no-confidence motion passed against former Prime Minister Tony Abbott, current Prime Minister Turnbull called for early elections in July 2016 in order to obtain a bigger majority. Despite being re-elected, this gamble failed, with the (Liberal – National) coalition losing 15 seats compared with the previous parliamentary term (76 seats won of the 150-seat House of Representatives). The political instability which has prevailed since 2010 (five prime ministers in six years) is thus set to continue. New elections before the end of his mandate (2019) cannot be ruled out if Turnbull wants a larger majority or if the more conservative wing of the party (Abbott's supporters) see it as an opportunity to pass a motion of no confidence against Turnbull.
Internationally, Australia's policy is to establish closer economic ties with the Asia-Pacific region (in particular China) while maintaining a special relationship with the United States. However, its membership of the Asian Infrastructure Development Bank (set up by China) could create tensions in its relationship with the United States.