Australia's abundant and diverse natural resources attract high levels of foreign investment and include extensive reserves of coal, iron ore, copper, gold, natural gas, uranium, and renewable energy sources. A series of major investments, such as the US$40 billion Gorgon Liquid Natural Gas project, will significantly expand the resources sector. Australia also has a large services sector and is a significant exporter of natural resources, energy, and food. Key tenets of Australia's trade policy include support for open trade and the successful culmination of the Doha Round of multilateral trade negotiations, particularly for agriculture and services. The Australian economy grew for 17 consecutive years before the global financial crisis. Subsequently, the Rudd government introduced a fiscal stimulus package worth over US$50 billion to offset the effect of the slowing world economy, while the Reserve Bank of Australia cut interest rates to historic lows. These policies - and continued demand for commodities, especially from China - helped the Australian economy rebound after just one quarter of negative growth. The economy grew by 1.2% during 2009 - the best performance in the OECD - and by 3.3% in 2010. Unemployment, originally expected to reach 8-10%, peaked at 5.7% in late 2009 and fell to 5.1% in 2010. As a result of an improved economy, the budget deficit is expected to peak below 4.2% of GDP and the government could return to budget surpluses as early as 2015. Australia was one of the first advanced economies to raise interest rates, with seven rate hikes between October 2009 and November 2010. The GILLARD government is focused on raising Australia's economic productivity to ensure the sustainability of growth, and continues to manage the symbiotic, but sometimes tense, economic relationship with China. Australia is engaged in the Trans-Pacific Partnership talks and ongoing free trade agreement negotiations with China, Japan, and Korea.
GDP (purchasing power parity): $882.4 billion (2010 est.) country comparison to the world: 18 $858.8 billion (2009 est.) $847.5 billion (2008 est.) note: data are in 2010 US dollars
GDP (official exchange rate): $1.236 trillion (2010 est.)
GDP - real growth rate: 2.7% (2010 est.) country comparison to the world: 131 1.3% (2009 est.) 2.6% (2008 est.)
GDP - per capita (PPP): $41,000 (2010 est.) country comparison to the world: 18 $40,400 (2009 est.) $40,300 (2008 est.) note: data are in 2010 US dollars
GDP - composition by sector: agriculture: 4% industry: 24.8% services: 71.2% (2010 est.)
Exports - commodities: coal, iron ore, gold, meat, wool, alumina, wheat, machinery and transport equipment
Exports - partners: China 21.81%, Japan 19.19%, South Korea 7.88%, India 7.51%, US 4.95%, UK 4.37%, NZ 4.1% (2009)
Imports - commodities: machinery and transport equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products
Imports - partners: China 17.94%, US 11.26%, Japan 8.36%, Thailand 5.81%, Singapore 5.54%, Germany 5.3% (2009)
The four largest retail banks in Australia are Westpac Banking Corporation, Commonwealth Bank, Australian New Zealand Bank (ANZ), and National Australia Bank (NAB). These are four of the ten global banks that carry AA ratings. Nevertheless, trade finance liquidity is an issue here as in the rest of the world.
While the banking system in Australia is reliable and transparent, there are structural and operational differences from the American system. Historically, Australian banks have not operated under the restrictions that limited U.S. bank operations between 1933 and the repeal of the Glass-Steagall Act. In Australia, the distinction between retail banks and investment banks has become increasingly blurred.
The Australian banking system is undergoing progressive deregulation and privatization. Foreign banks are allowed to enter the financial market. Retail banks, in general, now provide a wider range of financial services, including: life and general insurance, stock brokering, and security underwriting to retail customers, in addition to making corporate and consumer loans. This places them in competition with brokerage houses and merchant banks.
The Australian Government permits non-Australian banks to operate as branches to serve the wholesale market. Banking regulations, however, only allow retail banking activities through a locally-incorporated subsidiary.
The Reserve Bank of Australia (RBA) sets monetary policy and regulates the payment system. The Australian Prudential Regulation Authority (APRA) oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies (co-ops), and most members of the superannuation industry. APRA currently supervises institutions holding approximately USD3.6 trillion in assets for 21 million Australian depositors, policyholders, and superannuation fund members.
In 2009, the Australian Stock Exchange (ASX) was the 13th largest in the world and the market capitalization of shares of domestic companies on the ASX was about US$1.3 trillion, the fourth largest in the Asia-Pacific region. With 2,050 listed companies, the Australian stock market is currently the second largest liquid stock market in the Asia- Pacific (behind only Japan) at US$936 billion.
Aboriginal settlers arrived on the continent from Southeast Asia about 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 in the name of Great Britain. 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 British effort in World Wars I and II. In recent decades, Australia has transformed itself into an internationally competitive, advanced market economy. It boasted one of the OECD's fastest growing economies during the 1990s, a performance due in large part to economic reforms adopted in the 1980s. Long-term concerns include pollution, particularly depletion of the ozone layer, and management and conservation of coastal areas, especially the Great Barrier Reef.
Government type: federal parliamentary democracyCapital: name: Canberra time difference: UTC+10 note: Australia is divided into three time zones
Independence: 1 January 1901 (federation of UK colonies)
National holiday: Australia Day, 26 January (1788); ANZAC Day (commemorated as the anniversary of the 1915 landing of troops of the Australian and New Zealand Army Corps during World War I at Gallipoli, Turkey), 25 April
Constitution: 9 July 1900, effective 1 January 1901
Legal system: based on English common law; accepts compulsory ICJ jurisdiction, with reservations
Suffrage: 18 years of age; universal and compulsory
Chief of state: Queen of Australia ELIZABETH II (since 6 February 1952); represented by Governor General Quentin BRYCE (since 5 September 2008) head of government: Prime Minister Julia Eileen GILLARD (since 24 June 2010); Deputy Prime Minister Wayne Maxwell SWAN (since 24 June 2010) cabinet: prime minister nominates, from among members of Parliament, candidates who are subsequently sworn in by the governor general to serve as government ministers
elections: the monarchy is hereditary; governor general appointed by the monarch on the recommendation of the prime minister; following legislative elections, the leader of the majority party or leader of a majority coalition is sworn in as prime minister by the governor general
In 2007 Australia and Timor-Leste sign 50-year development zone and revenue sharing agreement in lieu of a maritime boundary; dispute with Timor-Leste hampers creation of a revised maritime boundary with Indonesia in the Timor Sea; regional states continue to express concern over Australia's 2004 declaration of a 1,000-nautical mile-wide maritime identification zone; Australia asserts land and maritime claims to Antarctica; in 2004 Australia submitted its claims to Commission on the Limits of the Continental Shelf (CLCS) to extend its continental margins covering over 3.37 million square kilometers, expanding its seabed roughly 30 percent more than its claimed exclusive economic zone; since 2003, Australia has led the Regional Assistance Mission to the Solomon Islands (RAMSI) to maintain civil and political order and reinforce regional security