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1.  World’s 13th largest economy
Global forecasts predict Australia will maintain its position as the world’s 13th largest economy (in US dollar terms) in 2017. Australia’s nominal GDP is estimated at US$1.3 trillion (A$1.7 trillion) and accounts for 1.7 per cent of the global economy. Australia has almost tripled the value of its total production from two decades ago.
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2.  26th year of consecutive annual economic growth
The Australian economy remains resilient, sustained by sound macroeconomic policies, strong institutions and solid trade ties with the Asia-Pacific region. Growing more than three per cent on average each year since 1992, Australia is the only major developed economy to have recorded no annual recessions from 1992 to 2016 and is now in its 26th year of consecutive growth.
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3.  Highest growth among advanced economies
Australia’s economic growth has outperformed its peers for the past two decades and the fundamentals are in place for this trend to continue. According to IMF forecasts released in October 2016, Australia is expected to realise average annual real GDP growth of 2.9 per cent between 2017 and 2021 – the highest among major advanced economies and up from an average growth rate of 2.7 per cent between 2012 and 2016.
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4.  Strong ties to Asia support long-term growth
Australia’s medium- and long-term growth outlook is supported by its strong ties to the Asia-Pacific region. By 2021, the regional economy is expected to account for 44 per cent of global production in terms of purchasing power parity valuation, more than double the ratio in 1981. Over the same period, the combined economies of China and India will likely represent almost 30 per cent of the world’s GDP, significantly up from around five per cent in 1981.
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5.  High productivity in growth sectors
The productivity levels of 15 out of 20 Australian industries rate above the average productivity of global competitors in the same sector. Australia is performing 20 per cent above this global average in five key growth sectors – gas, education, oil, tourism and health – and over 40 per cent in mining and agribusiness.
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6.  Diversified, services-based economy
Australia’s services sector (excluding construction) accounts for around 75 per cent of real gross value added (GVA). The country’s sophisticated financial services industry is the largest contributor to its economy, generating 9.4 per cent of total GVA. Other top sectors include mining, construction, health care and social assistance, manufacturing, and professional, scientific and technical services.
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7.  Steadily growing services sector
Australia’s services sector has expanded by an average of 3.4 per cent per annum, slightly above the all-industries average. Information media and telecommunications, financial and insurance services, and professional, scientific and technical services have seen solid growth, reflecting the country’s skills base in technology- and knowledge-intensive sectors. Australia’s construction and mining sectors continue to grow steadily.
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8.  Low Government debt
In its October 2016 Fiscal Monitor, the IMF estimated the Australian Government’s net debt would be 21.1 per cent of GDP in 2017, well below the 72.9 per cent forecast for advanced economies as a group. Australian Government debt is predicted to fall below 20 per cent of GDP by 2020, while the average debt ratio of advanced economies will remain at about 72 per cent of GDP. The low level of public sector debt reinforces the Australian Government’s healthy financial position and sound economic credentials, and underpins its strong sovereign ratings.
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9.  Globally Successful in Five Key Industries
Australia is a globally successful provider of products and services that are in high demand. The country is a major producer of natural resources, including significant LNG reserves that are about to come into production, and clean, green agricultural commodities and premium food. Australia has large, liquid financial markets, including the biggest pool of managed fund assets in the Asia-Pacific region. It is also a leading destination for education and tourism.
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10.  Services Attract Growing Foreign Direct Investment
Mining and manufacturing continue to account for over 50 per cent of foreign direct investment (FDI) stock in Australia by value. Around a third of Australia’s A$735 billion of FDI stock is in service-driven sectors. The service sectors experiencing the most significant growth in FDI stock between 2014 and 2015 were professional, scientific and technical services (23 per cent) and financial and insurance services (20 per cent).
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11.  Abundant Reserves of Mineral and Energy Resources
Australia is richly endowed with natural resources, enabling it to play an important role in supplying the world’s energy needs. The country has the world’s largest uranium resources and fourth-largest black coal resources, as well as large gas reserves. Australia is a global top five producer of major minerals including gold, iron ore, lead, zinc and nickel.
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12.  Leader in Energy and Resources
Australia’s abundant resources and proximity to Asia underpin its position as a major global exporter of mineral and energy resources and products. From 2000–01 to 2015–16, the country’s total resources and energy exports are estimated to have increased more than two and a half-fold to A$157 billion, with the majority of these exports going to Asian countries including China, Japan and South Korea. Continued growth in the export volume of most bulk commodities is expected to contribute to higher export earnings over the outlook period.
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13.  Growing Market for Renewables
Renewable energy accounted for 14 per cent of Australia’s total electricity generation in 2014–15, and is forecast to increase to 20 per cent by 2034–35. Wind, solar and bioenergy sources are also expected to grow significantly, leveraging Australia’s natural advantages. Electricity generation from wind power is expected to almost triple the current rate to account for over 10 per cent of Australia’s total electricity generation by 2034–35.
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14.  Top Agribusiness and Food Exporter to Asia
Australian food and fibre exports were worth A$45 billion in 2015–16, with nine of the top 10 destination markets (around 60 per cent of exports) in Asia. According to the OECD Development Centre, the number of middle-class consumers in the Asia-Pacific region is forecast to grow to approximately 3.2 billion (66 per cent of the world’s total) by 2030. Australia’s proximity to Asia and reputation as a safe and reliable source of quality produce and premium products ensure the country is well placed to capitalise on this growth.
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15.  Clean, Green and Safe Source of Agribusiness and Food
Australia is one of the 10 largest producers globally for almonds, wool, cotton, lamb, beef, barley, wheat and sugar cane. Demand for Australia’s clean and green agricultural commodities drives the country’s export trade in high-value branded premium products. Beef and wheat are Australia’s two largest agricultural exports and its two largest agricultural commodities in terms of production value.
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16.  Strong, Sophisticated Financial Markets
Australia has one of the largest and most sophisticated financial services sectors in the world. The country has deep and liquid financial markets, including the world’s sixth largest managed fund assets pool, and is a regional leader in investment management, infrastructure financing and structured products. The managed funds sector is underpinned by a mandated retirement savings scheme (superannuation system) that has resulted in the fourth largest pension pool in the world.
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17.  Australia’s A$7.5 Trillion Financial Sector
Australia’s sophisticated financial services sector has significant depth with estimated assets of around A$7.5 trillion – over four and a half times the country’s nominal GDP. The sector has grown 10 per cent a year over the past two decades, almost double the growth rate of nominal GDP. The strength of the financial industry means it is Australia’s largest contributor to gross value added, one of its highest growth sectors and a significant source of capital.
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18.  Asia’s Largest Pool of Funds Under Management
Australia has a large and mature managed funds industry, with total assets under management of A$2.7 trillion (US$2 trillion) in the June 2016 quarter. The country’s collective investment institutions manage about US$1.6 trillion of investment funds. This is the sixth largest pool of FUM in the world and the largest in the Asian region. A major driver of Australia’s funds management industry is its mandatory pension system.
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19.  Fourth Largest Pension System in the World
Australia’s A$2 trillion pension (superannuation) system is the fourth largest in the world and a major driver behind its globally significant funds management industry. This investible pool of pension assets is projected to double to A$4 trillion in the next 10 years and to reach A$9.5 trillion by 2035.
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20.  Top Three Destination for International Students
Australia is the third most popular destination for students choosing to study overseas, attracting more international students than larger economies like France, Germany, Canada and Japan. Education services are one of Australia’s leading exports, worth A$19.4 billion in 2015.
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21.  First Choice Higher Education Destination
Australia is a ‘first choice’ education destination across Asia. The country is a hub for business and technology-related education in the region, with almost 70 per cent of the 363,000 international students in Australia studying management, commerce, engineering or information technology.
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22.  Major Tourism Destination
Tourism is a growing global industry. Global tourism receipts have increased on average by five per cent per year since 2010, and accounted for 1.7 per cent of world GDP in 2015. Australia is the world’s 11th largest international tourism market – compared to the world average, tourism receipts contributed more to the Australian economy (2.4 per cent of GDP) and continued to grow at a faster rate (7.4 per cent per year since 2010).
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23.  Record Levels of International Tourism Expenditure
Australia experienced record inbound tourism expenditure in 2015–16, driven by strong growth from China, India, Singapore, Hong Kong and other Asian countries. Traditional markets such as the USA and New Zealand also performed well, up 20.0 per cent and 6.6 per cent respectively. The outlook to 2024–25 remains robust, with international visitor spending expected to rise by 6.6 per cent per annum to reach A$68 billion (in real terms). China, India and other Asian nations are anticipated to account for the majority of this forecast growth.
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24.  Skilled, Highly Educated Workforce
Australia offers a highly educated workforce with the skills to service a diverse range of industries. The country is ranked particularly well for its overall education system, secondary and tertiary education enrolment rates, student mobility and ready availability of skilled labour and finance skills.
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25.  Ready Supply of Tertiary-educated Workers
More than 40 per cent of Australian workers on average hold a tertiary qualification. Over half the workforce in education and training, professional, scientific and technical services, and financial and insurance services has a tertiary education, underpinning Australia’s global competitiveness in these sectors.
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26.  Diversified, Services-based Workforce
Around 80 per cent of Australians are employed in the services sector. Forty per cent of people work in sectors where tertiary education is standard for many employees, including education and training; professional, scientific and technical services; financial and insurance services; healthcare; information media and telecommunications; and public administration.
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27.  Productivity Growth Outpacing Labour Costs
Australia has enjoyed a sustained period of labour productivity growth exceeding growth in real wages. The country has experienced an 8.4 per cent increase in average labour productivity between 2010 and 2016, while real unit labour costs have risen by only 1.5 per cent, indicating the effective cost of labour has remained in line with productivity improvements.
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28.  Multicultural Population
Australia is one of the most multicultural countries in the OECD. The country’s overseas-born population (as a percentage of total population) has grown from 23.2 per cent in 2004 to 28.5 per cent in 2014, providing access to workers who are well equipped with the cultural understanding and language capabilities to service international businesses in their own languages.
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29.  Culturally Diverse Labour Force
Almost 30 per cent of Australia’s 12.6 million-strong labour force was born overseas. Many foreign-born workers are from Asia or Europe, enriching Australia’s reputation for multilingual, culturally diverse workplaces and boosting the nation’s competitive edge in international business.
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30.  Successful Trading Economy
Australia’s export volumes have increased as the strong inflow of foreign direct investment over the past decade has begun translating into new production capacity. The Australian dollar’s depreciation has also supported trade-exposed industries including agriculture, manufacturing and tourism. Total food exports value grew by around two per cent in 2015–16 to A$40 billion. Services contributed A$68 billion to export earnings in 2015–16, thanks to strong growth in education and tourism export values (up nine per cent and 17 per cent respectively).
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31.  Strong Two-way Trade with Major Asian Nations
Australia’s two-way trade in goods and services in 2015–16 totalled A$661 billion, making up about 40 per cent of nominal GDP. Trade with Asia-Pacific Economic Cooperation countries remained strong, with a total value of around A$476 billion, or around 72 per cent of Australia’s total trade. The ASEAN region is emerging as a significant market, with total export values reaching A$93 billion, or around 14 per cent of Australia’s two-way trade, in 2015–16.
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32.  Australia’s Top 12 Export Markets
Australia’s integration with the dynamic Asian region is driving wealth creation and overall growth. Of the top 12 export markets in 2015–16, 10 were in the Asian region and all were rated above investment-grade. Their combined value was around A$212 billion, making up more than two-thirds (68 per cent) of Australia’s total goods and services export earnings of A$312 billion in 2015–16.
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33.  High-growth Destination for Foreign Investment
Australia presently hosts more than A$3 trillion of foreign investment stock. Both foreign direct investment and other investment (including portfolio investment) have recorded strong growth, up 8.7 per cent and 10.5 per cent each year respectively since 1996. As a percentage of GDP, Australia’s total value of foreign investment stock reached 190 per cent in June 2016, more than double that of two decades ago.
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34.  Top Destination for Foreign Direct Investment
Australia remained one of the world’s top destinations for foreign direct investment (FDI) stock in 2015, with a 2.2 per cent share of the global stock of FDI. Australia received US$537 billion in FDI in 2015, up from 34 per cent of GDP to 44 per cent of GDP between 2005 and 2015 on the back of continued economic expansion and integration with trading partners, particularly the Asian region.
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35.  Asia a Growing Source of FDI
Australia’s inward FDI stock was A$735 billion in 2015, almost A$220 billion higher than the level in 2010. Traditional sources of FDI such as the USA, the European Union (including the UK) and Japan continued to perform well. The total value of Chinese FDI stock grew by more than A$22 billion between 2010 and 2015 to reach A$35 billion. FDI from the ASEAN region, largely driven by Singapore and Malaysia, has expanded by an average of 10 per cent per annum since 2010 to reach a total combined value of A$42 billion in 2015.
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36.  Positioned for 24-hour Business
Australia’s geographic location bridges major time zones, allowing companies to benefit from ‘follow-the-sun’ or ‘pass-the-book’ operations such as transaction processing in financial markets, help desks, customer service, IT support and other critical services. Australia’s counter-seasonality to the northern hemisphere also offers strategic advantages in food production and agribusiness.
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37.  Fifth in the World for Economic Freedom
Australia is ranked fifth in the world for overall economic freedom in the 2016 Index of Economic Freedom. The Index states “the economy has benefited from lasting entrepreneurial development facilitated by an effective system of government, a well-functioning legal system and an independent bureaucracy.” It stresses that “Australia continues to be an attractive and dynamic investment destination, with almost all industries open to foreign competition and a skilled workforce readily available.”
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38.  Ranked 15th For Ease of Doing Business
Australia is ranked 15th out of 190 economies for ease of doing business, and fifth when compared to economies with a similar or larger population. In particular, Australia’s quality of judicial processes index is rated the world’s best. Australia also ranks well for dealing with construction permits (2nd globally), enforcing contracts (3rd), ease of getting credit (5th) and starting a business (7th).
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39.  Cost-competitive Location for Office Space
Prime office space in Australia (using an average of all major cities) is among the most competitively priced in the world, and compares favourably to global and regional business centres. The cost of prime office space in Sydney is less than a third of the cost of Hong Kong (Central) and half of that in Beijing (Finance Street).
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40.  Competitive Remuneration Rates for Professionals
Australia offers a highly skilled, multilingual and attractively priced domestic workforce. Salary levels for skilled professionals are generally competitive relative to major centres around the world, due to moderate wage growth over the past three years and a lower Australian dollar.
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41.  Stable, Friendly and Efficient Business Environment
Australia has one of the world’s most robust regulatory environments and is rated among the most business-friendly economies. The country is ranked highly in terms of legal rights, justice, the soundness of its banks and corporate debt. Australia is also in the world’s top 10 for its efficient stock markets, strong finance and banking regulations and stable institutional frameworks.
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42.  Good Governance and Strong Institutions
The quality of governance in Australia ranks among the best in the world. The country’s strong governance and stable institutions are key to sustaining economic growth and security, providing assurance for multinationals expanding their businesses or considering Australia as a base in the Asian region.
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43.  Enviable Quality of Life
Australia’s major cities enjoy some of the highest quality of living in the world. Sydney ranks 10th globally, Melbourne 15th and Perth 21st in Mercer’s 2016 Quality of Living Rankings. These three cities top the rankings across the Asia-Pacific region, well above Singapore (26th), Tokyo (44th), Hong Kong (70th), Shanghai (101st) and Beijing (118th).
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44.  Record of Innovation
Australia has a strong record of innovation, underpinned by its significant government and private sector R&D investment and quality-enabling ICT infrastructure. The country has a higher percentage of people employed in knowledge-intensive services than Canada, France, the USA, Germany, Japan and South Korea. Nearly 72 per cent of Australian research institutions (including universities, medical research institutes, businesses and publicly funded research agencies) achieve above average impact across their publications output.
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45.  Australian Industry a Source of R&D Expenditure
Australia’s annual gross expenditure on R&D (GERD) rose by nine per cent per annum between 2000–01 and 2014–15 to exceed A$33 billion. Business expenditure on R&D accounts for 57 per cent of Australia’s total R&D expenditure, expanding from A$5 billion in 2000–01 to about A$19 billion in 2014–15. This represents a compound annual growth rate of 11 per cent since 2001, well above Australia’s nominal GDP growth rate of 6.1 per cent. Total GERD represents 2.1 per cent of Australia’s nominal GDP, up from 1.5 per cent in 2001.
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46.  Leading Economy for R&D Expenditure
Australia has a high proportion of researchers and its R&D expenditure as a percentage of GDP in purchasing power parity terms is strong. The nation’s R&D spend places it among the world’s leading innovative countries, including the USA, Japan, France, Germany, Sweden and South Korea.
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47.  Growing R&D Spending Economy
Australia’s expenditure on R&D is one of the fastest-growing in the world, reflecting the country’s ongoing commitment to innovation. Gross R&D expenditure in Australia has increased on average by 8.5 per cent a year in real terms since 2000, well above the OECD average growth rate of 4.8 per cent. The country’s total expenditure on R&D in purchasing power parity terms is ranked in the top 10 among OECD member nations.
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48.  Australian Scientific Research Has Major Impact
Australia’s scientific research publications averaged a relative impact of at least 20 per cent above the global average in almost 82 per cent of the 22 scientific research fields in the Essential Science Indicators classification. Australia’s seven strongest categories of published research – computer science, multidisciplinary, physics, environment/ecology, space science, clinical medicine and engineering – reflect the country’s diverse research interests.
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49.  Top Ranking Academic and Research Institutions
In a ranking of the world’s top 200 universities by five key subject fields, Australia has remained the fifth highest ranked country overall, with particularly strong performances in Life and Agriculture Sciences, Engineering/Technology and Computer Sciences, and Clinical Medicine and Pharmacy. Australia’s performance is rated higher than economies such as Japan, France, Italy and Switzerland.
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