Policy Performance


Economic Policies

With household incomes trailing the overall growth in the economy, Australia falls into the lower-middle ranks (rank 24) with respect to economic policy. Its score in this area has fallen by 0.1 points relative to 2014.

While GDP growth has returned to its long-term trend, real per capita household disposable income has stagnated below its 2012 level. A decline in terms of trade has hit wages, and hence household incomes, hard. Unemployment rates remain low, but underemployment is a problem. Virtually no increase in real average earnings has been seen since 2013.

Tax revenue has picked due to growth in company tax receipts. However, the housing boom, a decades-long driver of economic growth, has come to an end, with housing prices now declining. Company tax rates are dropping for SMEs, and a significant reduction in top marginal income tax rate is planned.

Public debt levels remain comparatively low, but fiscal sustainability remains a concern. The tax-to-GDP is very low in cross-OECD comparison, arguably creating infrastructure-development bottlenecks. Private-sector debt levels are very high, and banks are highly exposed to the now-declining real-estate sector.

Social Policies

With cost-of-living issues a rising concern, Australia falls into the upper-middle ranks with regard to social policy (rank 15). Its score in this area has declined by 0.3 points relative to 2014.

Integration policy has a long and generally successful history, although a surge in temporary migration – somewhat diminished in recent years – has raised integration concerns. The navy actively prevents vessels containing asylum seekers from reaching Australian shores, and the indigenous population remains badly marginalized.

The government strongly subsidizes private schools, increasing inequity. University fees have increased and direct government funding has been cut, but poor students still have access. Public pensions are comparatively small, but deprivation rates are low, particularly for those who own their own homes. A shift toward private pensions is underway.

The health care system is generally of high quality, though waiting periods can be long. Total health care expenditure is relatively low. Despite the introduction of taxpayer-funded subsidies for child care, real costs have risen steadily for parents. A new fund is financing innovative trial projects for groups deemed to be at risk of long-term welfare dependency.

Environmental Policies

Emissions concerns and unaddressed infrastructural needs have left Australia scoring relatively poorly (rank 31) with respect to environmental policy. Its score on this measure has declined by 0.1 points relative to 2014.

CO2 emissions are rising, while a goal of reducing carbon emissions by 2030 is not associated with a credible plan for doing so. A recently completed review of the power-generation market offers the prospect of improving renewable-energy production, but delayed action has kept energy prices high, and progress with regard to emissions reductions has been very limited.

Public-transport gaps call for infrastructure investments as a key element in future environmental policies; however, the rate of actual investment in new infrastructure has been worryingly low, contributing to carbon-emissions concerns. Water security and water management policies have improved in recent years.

Accelerating biodiversity decline is a serious concern. The issues of carbon-emission reductions and participation in international environmental regimes have divided the political left and right.



Quality of Democracy

With an open, transparent electoral regime, Australia’s democracy falls into the upper-middle ranks (rank 15) in international comparison. Its score on this measure has declined by 0.4 points since 2014.

While civil rights and political liberties are generally well protected, anti-terrorism laws have become progressively stronger, prompting civil and human rights concerns. Asylum seekers are processed offshore, denying them the rights accorded to citizens. Same-sex marriage has been legalized.

State and territory governments have independently improved campaign-funding disclosure requirements. Investigations indicate that both major political parties have accepted Chinese-origin donations, exacerbating ongoing tensions with China. A court ruling barring parliamentarians from holding dual citizenships has affected numerous lawmakers, generating political instability.

Media organizations are largely independent, but a reduction in ownership regulations have led to increasing concentration among the largest media companies. Anti-terrorism laws allow some restrictions on media reporting.

Anti-discrimination laws are generally strong, but surveys indicate that discrimination against women remains a problem. While corruption is generally rare, some problems at the state and local levels remain.



Executive Capacity

Despite instability in the prime minister’s office, Australia falls into the upper-middle ranks (rank 15) in the sphere of executive capacity. Its score on this measure has declined by 0.5 points relative to 2014.

The government office coordinates policy development, working closely with line ministries. Significant recent public-sector jobs cuts have threatened to undermine planning ability, and fluctuations in the prime minister’s office have weakened cabinet discipline in recent years. While regulations tend to be enforced in an unbiased manner, their creation process is often heavily influenced by powerful interests.

RIAs are generally required at the federal and state levels, though these often lack transparency and do not explicitly address long-term sustainability. Despite a tradition of communication coherency, the current government has not conveyed a clear direction. Some new foreign policy ambition is evident with regard to shaping South Pacific relations.

While many tasks are constitutionally delegated to states and territories, funding is often inadequate, and likely to fall further. However, federal/state relationships have improved markedly in recent years. Australian society shows a willingness to resist international pressures, as on the issues of migrants or emissions policy.

Executive Accountability

Despite declining citizen engagement with the political system, a well-developed legislative-oversight capability helps Australia scores well (rank 7) for executive accountability. Its score in this area has declined by 0.4 points relative to 2014.

Parliamentarians have substantial resources and powers at their disposal to monitor the executive. Audit and ombuds offices act capably and independently. State-level and issue-specific ombuds offices also exist. Budget cuts at the privacy and data-protection office have diminished its efficiency, but resources have recently been restored somewhat.

Citizens have shown a falling interest in political issues, and the rate of citizens casting invalid votes is rising despite compulsory voting. Media diversity is declining, potentially undermining the public’s policy knowledge, though online news providers are reinvigorating the sector to some extent.

Internal political-party decisions are primarily made by elected officials, although ordinary members have gained a stronger voice in recent years. Major economic organizations are sophisticated and work closely with the government. Many other interest groups also offer high-quality proposals.
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