Sustainable Policies


Economic Policies

With a positive government budgetary balance masking some underlying weaknesses, Australia falls into the lower-middle ranks (rank 21) with respect to economic policy. Its score in this area has improved by 0.2 points relative to 2014.

GDP growth weakened in 2019, but the country avoided slipping into recession. The unemployment rate rose slightly, reaching 5.3% in September. Underemployment rates remain high, but long-term unemployment rates are low. While real disposable incomes have stagnated for years, tax revenues have increased, leading to forecasts of a 2019 budget surplus.

A housing boom that drove growth for nearly three decades has come an end. Conflict with China has dampened economic growth prospects. A tax-system change has significantly reduce income-tax progressivity. Net federal debt is very low by international standards, but fiscal sustainability remains a concern.

The moderate tax levels have contributed to low-quality public infrastructure. The tax system does little to produce ecological sustainability. 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 17). Its score in this area has declined by 0.2 points relative to 2014.

Integration policy has a long and generally successful history, with integration through the labor market a key factor in migrants’ success. However, skepticism toward migration is rising. The navy actively prevents vessels containing asylum seekers from reaching Australian shores, and the indigenous population remains badly marginalized.

The country spends considerably below the OECD average on preschools, and the high cost of childcare continues to be a problem for many families. Students’ test results have been declining compared to other countries in the region. Universities are highly reliant on foreign-student fees, exposing the sector to a downturn in this market.

The healthcare system is generally of high quality, though waiting periods can be long. Total healthcare expenditure is relatively low. The age of pension eligibility is being increased, and concerns over the retirement income system have prompted a new review of its sustainability.

Environmental Policies

Emissions concerns and unaddressed infrastructural needs have left Australia scoring relatively poorly (rank 33) with respect to environmental policy. Its score on this measure has declined by 0.6 points relative to 2014.

Energy consumption levels are generally high, with renewable energy contributions low despite great potential for solar and wind power. Energy prices are high, and emissions reductions efforts have made limited progress, with no effective means apparent for the achievement of 2030 reduction targets. There has been little focus on climate change policy overall.

Environmental policy has focused instead on water-security issues. Some progress has been made with desalination plants and water-management plans. However, sustained droughts have exacerbated the challenges. Accelerating biodiversity decline is a serious concern.

Successive governments have shown considerable reluctance to engage in global cooperative environment-protection issues, though the country is a signatory to many relevant agreements. The government has focused on protecting the Great Barrier Reef as a global common good.

Robust Democracy


Quality of Democracy

Despite its open, transparent electoral regime, Australia’s democracy falls into the middle ranks (rank 21) in international comparison. Its score on this measure has declined by 0.6 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. New laws sharply limit political donations from foreign government or state-owned enterprises, and require lobbyists for foreign entities to register as such.

The government has used recently passed anti-terror laws to raid journalists’ homes and offices. Media groups are pushing to restore protections for the media and whistleblowers. Politicized regulations are a further threat to media independence.

Anti-discrimination laws are generally strong, but surveys indicate that discrimination against women remains a problem. Same-sex marriage was recently approved by parliament. While corruption is generally rare, some problems at the state and local levels remain.

Good Governance


Executive Capacity

Despite recent 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. 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. A new consultation process will give Indigenous voices greater input into decision-making processes, but has been criticized as insufficiently ambitious.

While many tasks are constitutionally delegated to states and territories, funding is often inadequate, and appears 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, and the government has focused on narrowly defined national interests.

Executive Accountability

Despite declining citizen engagement with the political system, a well-developed legislative-oversight capability helps Australia score 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 somewhat restored.

Citizens have shown declining interest in political issues, and express disillusionment with politics more generally. 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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