Growth and obstacles to growth in the Australian economy

Abstract

This paper examines factors that have contributed to economic growth in Australia. During the last decade the Australian economy has been among the best performed of developed countries. In fact the Australian economy has performed well since the process of deregulation started in the early 1980s. Australia tried, unsuccessfully, to become a member of ASEAN and then to deepen the embrace of APEC. The Asian financial crisis of 1997-98 reduced the attractiveness of ASEAN and the September 2001 attacks in the US appear to have significantly reduced the effectiveness of APEC. Australia has completed free trade agreements with New Zealand, Thailand and Singapore and talks with the US regarding a free trade agreement have led to an agreement that is likely to gain legislative approval. At present, the trade sector stands as the most important obstacle to Australian economic growth. The reactive nature of the Australian market is also a significant obstacle to sustained growth of export performance and the rising level of consumer debt needs to be checked through a mix of effective monetary and fiscal policies.