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1.  A large and growing economy
Despite Australia comprising just 0.3 per cent of the world’s population, its economy is expected to be the 14th largest in the world and the fifth largest in the Asian region in 2019. Australia’s nominal GDP is estimated at US$1.5 trillion (almost A$2 trillion) and accounts for 1.7 per cent of the global economy. In 1999, Australia’s total production value was just US$411 billion, meaning it has more than tripled in two decades.
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2.  28th year of consecutive annual economic growth
Australia has entered its 28th year of uninterrupted annual economic growth, increasing 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 2018. The economy’s robustness is sustained by solid policy frameworks, strong institutions, an attractive investment environment and deep trade ties with the Asian region.
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3.  Highest growth among major advanced economies
Australia has continued to enjoy a robust economic performance relative to other developed economies while adjusting to the end of the mining boom of the 2000s. Australia is expected to realise average annual real GDP growth of 2.7 per cent between 2019 and 2023 – the highest among major advanced economies and up from an average growth rate of 2.6 per cent between 2014 and 2018.
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4.  Strong ties to Asia support long-term growth
Australia’s strong ties to the Asian region support a positive medium- and long-term growth outlook. By 2023, the regional economy is expected to account for 46 per cent of global production (US$81 trillion out of US$177 trillion) in terms of purchasing power parity valuation, more than double the ratio in 1983 (22 per cent). Over the same period, the combined economies of China and India will likely represent around 30 per cent of the world’s GDP, significantly up from six per cent in 1983.
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5.  Diversified, services-based economy
Australia’s economy is dominated by the services sector, which accounts for more than 75 per cent of real gross value added (GVA). Within the services sector the largest contributor to GVA is financial and insurance services, which generates 9.5 per cent of total GVA. Other top contributors include construction; health care and social assistance; professional, scientific and technical services; mining; and manufacturing.
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6.  Steadily growing services and technology sectors
Australia’s services sector (including construction) has expanded by an annual average of 3.6 per cent since 1992, above the goods sector’s annual average of 2.1 per cent. Information media and telecommunications; professional, scientific and technical services; and financial and insurance services have seen solid annual growth rates of above 4.5 per cent, reflecting the country’s skills base in technology- and knowledge-intensive sectors.
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7.  Low government debt
The IMF estimates the Australian Government’s net debt will be less than 20 per cent of GDP in 2019, well below the 74 per cent forecast for advanced economies as a group. Australian Government debt is predicted to fall to around 15 per cent of GDP by 2023, while the average debt ratio of advanced economies will remain high at around 73 per cent of GDP. The low level of public sector debt underpins Australia’s AAA sovereign credit rating and stable outlook from all three rating agencies.
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8.  Globally successful in five key industries
Australia is a major producer of in-demand agricultural commodities, premium food and natural resources. The nation is a leading destination for international tourists and students in tertiary education. It also has large, expanding, sophisticated financial markets, including the world’s sixth largest pool of managed fund assets.
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9.  A leader in new technologies
Australia’s transition to a services-based economy is driving the development of new technologies in agriculture, education, financial services and health, among other sectors. This includes the use of blockchain in finance, immersive simulation technologies in education, robotics in medical procedures and the Internet of Things in agriculture.
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10.  Abundant reserves of mineral and energy resources
Australia’s natural resources continue to be a vital contributor to the nation’s wealth. It has the world’s largest resources of iron ore, gold, lead, zinc, nickel, rutile and zircon, as well as the second largest bauxite, cobalt, silver and copper reserves. Australia also has the world’s largest uranium reserves and the second largest brown coal deposits, enabling it to play an important role in supplying the world’s energy needs.
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11.  Leader in mineral and energy exports
Proximity to the resource-hungry markets of Asia underpins Australia’s position as a major global exporter of mineral and energy resources and products. From 2002–03 to 2017–18, Australia’s total resources and energy exports are estimated to have increased more than four-fold to almost A$230 billion, with the majority going to Asian countries. Steady 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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12.  Growing market for renewables
Renewable energy accounted for over 15 per cent of Australia’s total electricity generation in 2016–17. Over the past decade, the amount of energy generated by wind and solar sources has grown significantly, leveraging Australia’s natural advantages. Electricity generation from wind and solar power sources accounted for half of Australia’s renewable energy generation in 2017, up from 13 per cent 10 years ago.
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13.  Top agribusiness and food exporter
Australia’s food and fibre exports were worth more than A$50 billion in 2017. Nine of the top 10 destination markets (63 per cent of total food exports) were located in Asia. The Brookings Institution forecasts Asia’s middle-class consumers to number approximately 3.5 billion (two-thirds of the world’s total) by 2030. Australia’s proximity to Asia and reputation as a safe and reliable source of quality produce ensure it is well placed to capitalise on this growth.
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14.  Clean, green and safe source of agribusiness and food
Demand for Australia’s agricultural commodities drives the country’s export trade in high-value branded premium products. Australia is a major global producer of beef, wheat, wool, wine, barley, lamb, raw cotton, sugar, canola, live feeder/slaughter cattle and chickpeas. Beef and wheat are Australia’s two largest agricultural exports as well as its two largest agricultural commodities in terms of production value.
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15.  Strong, sophisticated financial markets
Australia has deep and liquid financial markets, including the world’s sixth largest managed fund assets pool, eighth largest foreign-exchange market and ninth largest stock market. 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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16.  Australia’s A$8 trillion financial sector
Australia’s mature financial services sector has estimated assets of around A$8.5 trillion (US$6.3 trillion) – over four-and-a-half times the country’s nominal GDP as at June 2018. On average, the sector has grown 9.4 per cent a year over the past two decades, well above the average nominal GDP growth rate of 5.9 per cent. The strength of the financial services 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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17.  A top destination for education and skills training
Australia is the third most popular destination in the world for foreign students enrolled in higher education. Australia attracted over 623,000 international students in 2017, including higher education, vocational education and training, English language, and schools. International education contributed over A$30 billion to the Australian economy in 2017, with both student numbers and export value in their fourth consecutive year of double-digit growth.
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18.  Major tourism destination
Australia is the world’s seventh largest international tourism market based on its 3.1 per cent share of global tourism receipts (US$42 billion out of US$1.3 trillion). Australia benefits more from the contribution of tourism receipts as a percentage of its GDP than nations such as the USA, France, UK, Italy, China and Japan. The Australian Bureau of Statistics estimates that tourism contributed 3.2 per cent to Australia’s total GDP (or A$55 billion) in 2016–17.
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19.  Record levels of international tourism expenditure
In 2017–18, Australia experienced record inbound tourism expenditure, led by strong growth from China, India, South Korea and Indonesia. Collectively, the tourism expenditure of the top 10 Asian markets (including New Zealand) grew by almost seven per cent to A$24 billion – totalling more than half of Australia’s tourism receipts.
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20.  Record of innovation
Australia is a nation of inventors and entrepreneurship is on the rise. The nation’s rollcall of inventions, which includes high-speed wi-fi and Google Maps, speaks for itself. Australia welcomes investment in its intellectual capital to help lay the groundwork for future discoveries.
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21.  An innovative, highly educated nation
Australia’s highly educated workforce has the skills to service a diverse range of industries. The 2018 Human Development Index ranked Australia third in the world – well above many other major developed economies and ahead of all members of the G7. The quality of Australia’s ICT infrastructure, its human capital and research, and scientific research publications are all ranked in the world’s top 10.
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22.  Leading economy for R&D expenditure
Australia invests approximately US$21 billion on R&D (on a purchasing power parity basis). The nation’s R&D expenditure places it among the world’s leading innovative countries, including the USA, Japan, France, Germany and South Korea. Australia’s gross R&D expenditure has increased, on average, by around 6.8 per cent annually in PPP terms since 2000 – well above the OECD average growth rate of 4.8 per cent.
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23.  Australian industry drives R&D expenditure
Australia’s annual gross expenditure on R&D is growing strongly, having risen around eight per cent per annum between 2000–01 and 2015–16 (in Australian dollar terms). Business expenditure on R&D accounts for 52 per cent of Australia’s total R&D expenditure, increasing from A$5 billion in 2000–01 to about A$17 billion in 2015–16.
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24.  Australian scientific research has major impact
In 19 out of 22 scientific research fields, Australia’s scientific research publications averaged a relative impact of at least 20 per cent above the global average. Australia’s seven strongest categories of published research – multidisciplinary, space science, physics, computer science, clinical medicine, engineering and environment/ecology – reflect the country’s diverse research interests.
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25.  Top ranking academic institutions
Australia has six universities in the top 100 in the 2018 Academic Ranking of World Universities (ARWU): the University of Melbourne, the University of Queensland, the University of Sydney, the Australian National University, Monash University and the University of Western Australia. Twenty-three Australian universities are listed in the ARWU top 500 ranking in 2018, compared with 14 in 2004.
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26.  Culturally diverse labour force
Over 30 per cent of Australia’s 12.6 million-strong employed persons were born overseas. Many foreign-born employees are from Asia or Europe, enriching Australia’s reputation for culturally diverse workplaces and boosting the nation’s competitive edge in international business.
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27.  Diversified, services-based workforce
Eighty-eight per cent of Australians are employed in the services sector. Over 40 per cent (five million people) work in sectors where tertiary education is standard for many employees. This includes: education and training; professional, scientific and technical services; financial and insurance services; health care and social assistance; public administration and safety; and information media and telecommunications.
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28.  A multicultural population
Twenty-eight per cent of Australia’s population was born overseas in 2017 – the third highest percentage among OECD member nations. This ratio is up from 2000 when it was 23 per cent. Almost 3.2 million (one in seven) Australians speak an Asian language – more than 900,000 speak a Chinese language and 800,000 speak a Southern Asian language – while 1.4 million Australians speak a European language.
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29.  Australia’s top 12 export markets
Australia’s links to Asian markets are more vital than ever. In 2017, 10 of Australia’s top 12 export markets were located in Asia and all were rated above investment-grade. Their combined value was around A$275 billion, making up more than 70 per cent of Australia’s total goods and services export earnings of A$387 billion in 2017. Since 2007, the total export value of Australia’s top 10 Asian markets has doubled.
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30.  Strong two-way trade
In 2017, Australia’s two-way trade in goods and services totalled A$763 billion, making up more than 40 per cent of nominal GDP. The Asian region accounted for around two-thirds of Australia’s total trade, with a strong compound annual growth rate of seven per cent since 2007. Nine of Australia’s 12 largest markets – with a total trade value of around A$453 billion – are in Asia and Oceania, reflecting the nation’s advantageous location and integrated economic ties.
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31.  Successful trading economy
Australia’s export volumes have continued to increase as the inflow of foreign direct investment (FDI) since 2007 translates into new production capacity. The nominal export value of goods and services surged by 15 per cent in 2017, with robust growth in mineral and fuel exports. Services exports increased by almost nine per cent in 2017 and contributed A$85 billion to export earnings, due to strong growth in education and tourism services.
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32.  High-growth destination for foreign investment
Australia hosts around A$3.6 trillion of foreign investment stock. FDI and other investment (including portfolio investment) have recorded strong growth, up 8.8 per cent and 9.3 per cent on average each year respectively since 1998. As a percentage of GDP, Australia’s total value of foreign investment stock reached 193 per cent in June 2018, almost double that of two decades ago.
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33.  Asia: a growing source of foreign direct investment
After an average annual increase of eight per cent over 2015 and 2016, Australia’s inward FDI stock value grew by around seven per cent to A$849 billion in 2017. As a percentage of GDP, Australia’s inward FDI stock was 47 per cent in 2017, up from 37 per cent in 2011. The USA and EU remain the dominant sources of FDI but there has been a solid increase in capital inflows from Asia, particularly China and the ASEAN region.
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34.  Australia: a top 10 destination for foreign direct investment
In 2017, Australia was the eighth largest recipient of FDI inflows, up one place from 2016. From 2011–17, Australia’s average annual FDI inflow was US$47 billion, compared with an annual average of US$28 billion over the previous seven years (2004–10). This represents a growth rate of 70 per cent over the two time periods, which raised Australia’s share of global FDI inflows to 3 per cent from 2011–17, compared to 2.2 per cent from 2004–10.
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35.  Services attract growing foreign direct investment
Around half of Australia’s A$849 billion worth of FDI stock in 2017 was invested in service-driven sectors. The sectors experiencing the most growth in FDI stock between 2016 and 2017 were real estate (up 20 per cent to A$91 billion), construction (23 per cent to A$25 billion) and utilities (39 per cent to A$22 billion). Mining, manufacturing and agriculture accounted for the other 50 per cent of Australia’s FDI stock in 2017.
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36.  The valuable contribution of foreign-owned businesses
Majority foreign-owned businesses made significant economic contributions to Australia’s mining industry (A$39 billion) and manufacturing industry (A$29 billion). The percentage of industry value added (IVA) was approximately 33 per cent for mining and 30 per cent for manufacturing. Other sectors that attracted major contributions included the professional, scientific and technical services industry (A$28 billion and 26 per cent IVA) and the wholesale trade industry (A$26 billion and 43 per cent IVA).
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37.  A welcoming destination for foreign-owned businesses
The latest figures from the Australian Bureau of Statistics (2014–15) indicate US-owned businesses made the largest contribution to Australia’s economy. EU-28-owned businesses also have a substantial presence in Australia, as do organisations from Japan. Many have developed longstanding investment relationships, built on a history of shared values and common approaches to global challenges.
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38.  Expanding network of free trade agreements
Australia currently has 11 free trade agreements (FTAs) in force with 18 World Trade Organization members. The countries covered by these FTAs account for almost 70 per cent of Australia’s total trade. With several FTAs under negotiation, the expanding network of agreements will provide a greater range of trade and investment opportunities and improve Australia’s position to take advantage of growth in the Asia-Pacific region. Investment frameworks established by these agreements also support a more attractive and predictable investment environment and help drive further economic integration in the Asian region.
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39.  An attractive place to do business
Australia is one of the easiest countries in the world to set up and operate a business, ranking in the top 20 out of 190 economies. It takes around 2.5 days and a minimum of three procedures to start a business. Australia is also placed in the top 10 for enforcing contracts (5th), getting credit (8th) and dealing with construction permits (9th).
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40.  Fourth largest pension system in the world
In 2017, Australia became the world’s fourth largest pension (superannuation) market, valued at US$1.9 trillion. It also experienced one of the highest growth rates of pension fund assets in the world. Australia’s pension assets rose to almost 140 per cent of GDP in 2017, up from 114 per cent in 2007. These findings illustrate the size and long-term growth of Australia’s pension system, which is a major force behind the country’s rapidly expanding, globally significant managed funds industry.
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41.  Stable, friendly and efficient business environment
Australia is rated among the most business-friendly economies and has one of the world’s most robust regulatory environments. The nation ranks highly on social capital, the soundness of its banks, central bank policy, and the economy’s resilience to economic cycles. Australia is also in the world’s top 10 for business legislation (complexity of tariff, equal opportunity and efficiency of clearance processes), judicial independence and rule of law.
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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, stable institutions, robust rule of law and low level of corruption are vital to sustaining economic growth and security. These factors provide assurance for multinational companies considering Australia as a base from which to launch operations into the Asian region.
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43.  Cost-competitive location for office space
The cost of prime office space in Melbourne, Brisbane and Perth is inexpensive relative to Beijing, Tokyo, New Delhi, Shanghai, Seoul and Singapore; and less than a quarter of the cost of Hong Kong and London. Office space in Sydney’s CBD is a third of the cost of Hong Kong SAR (Central) and around half the cost of New York (Midtown Manhattan) and London (West End).
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44.  Enviable quality of life
Australia’s major capital cities continue to offer the world’s highest quality of living and are attractive destinations for expatriates on assignment. Sydney ranks 10th, Melbourne 16th and Perth 21st in Mercer’s 2018 Quality of Living Rankings. These three cities top the rankings across the Asian region, above Singapore (25th), Tokyo (50th), Hong Kong SAR (71st), Shanghai (103th), Beijing (119th) and Mumbai (154th).
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