Commonwealth of Australia
LOCATION AND SIZE.
Australia is a continent and a country in the Southern Hemisphere, lying to the south of Southeast Asia, and dividing the Indian and South Pa cific Oceans. The total area of Australia is 7,686,850 square kilometers (2,967,892 square miles), with land constituting 7,617,930 square kilometers (2,942,282 square miles) and water 68,920 square kilometers (26,610 square miles). Australia is about the same size as the United States, not including Alaska. The only country that occupies an entire continent, the Commonwealth of Australia does not share any land boundaries with other nations. The length of the country's coastline is 25,760 kilometers (16,007 miles). The capital, Canberra, is lo cated in the southeast corner of the nation and lies ap proximately halfway between the 2 largest cities, Sydney and Melbourne.
INFRASTRUCTURE, POWER, AND COMMUNICATIONS
Australia's transport and communications infrastructure has developed rapidly in close conjunction with the expansion of the country's main industries. The development of transport infrastructure in Australia has been almost entirely related to moving commodities for sale in cities or to gaining access to seaports.
In 1996, Australia had 913,000 kilometers (567,338 miles) of roads, of which 353,331 kilometers (219,559 miles) were paved. Freeways constitute 13,630 kilometers (8,469 miles) of total roads in Australia. Road infrastructure in Australia is generally very good. Both urban and inter-city roads are well developed across the country. However, congestion, especially that caused by competition between freight and passenger road users, is becoming a problem in the large cities. The main cities affected are Adelaide, Melbourne, Sydney, and Brisbane; Sydney has the worst congestion problems, followed by Melbourne, then Brisbane. Intra-urban movement constitutes about half the total tonnage of road freight in Australia.
In 1999 there was a total of 33,819 kilometers (21,015 miles) of rail lines in Australia. Rail infrastructure exists in both urban networks (mostly commuter rail) and regional networks (mostly freight rail). Rail infrastructure in Australia has never received much government support, despite the country's relatively flat topography and large distances. The consequence has been the development of a few high demand corridors being serviced by relatively poor infrastructure. While current rail infrastructure has sufficient capacity to deal with demand, major investments, totaling at least US$2 billion, have been identified as necessary to deal with the expected increase
|Country||Newspapers||Radios||TV Sets a||Cable subscribers a||Mobile Phones a||Fax Machines a||Personal Computers a||Internet Hosts b||Internet Users b|
|a Data are from International Telecommunication Union, World Telecommunication Development Report 1999 and are per 1,000 people.|
|b Data are from the Internet Software Consortium ( http://www.isc.org ) and are per 10,000 people.|
|SOURCE: World Bank. World Development Indicators 2000.|
in transport demand over the next 20 years. Additionally, conflicts between commuter and freight rail operators are becoming typical of the rail transport centers of Sydney, Melbourne, and Brisbane.
Australia currently has 408 airports, 15 of which serve as major intersections and destinations. The national air carrier is Qantas Airways. The country's second largest air carrier, Ansett Airlines, also has an extensive domestic network. The primary commercial airports are Sydney, Melbourne, Brisbane, Adelaide, and Perth. There are an additional 254 regional airports with paved runways across the country. Almost all of Australia's air movements constitute passenger travel. While Australia's air infrastructure is well developed, it has become increasingly overused and overworked and faces increasing maintenance and development costs. Between 2000 and 2020, an estimated US$1.4 billion in new investment will be required to adequately service air travel demand. Of this amount, roughly 67 percent will be directed at terminal expansion for the primary international airports. Currently, Australia's largest and most congested airport, the Kingsford Smith Airport in Sydney, remains efficient by world standards. Australia's main regional airports (Canberra, Coolangatta, Cairns, Darwin, and Hobart) are operating within capacity.
Australia has 14 major seaports, including Fremantle (Perth), Darwin, Brisbane, Newcastle, Sydney, Port Kembla, Adelaide, Melbourne, Davenport, and Hobart. In addition, export-dedicated seaports are located at Gladstone, Weipa, Hay Point, Dampier, and Port Hedland. Australian seaports are currently under-utilized, and most ports have the infrastructure to meet demand for the next 2 decades. The Bureau of Transport and Communication Economics found in 1996 that spending on infrastructure development will not likely exceed US$500 million over the next 20 years.
Australia does not import or export electricity. The country produces its own electricity supply, which is generated from coal (89.85 percent), hydro-electricity (8.35 percent), and other sources, mainly renewable energy (1.8 percent). Australia does not generate or consume electricity from atomic power. Total electricity production in Australia was 186.39 billion kilowatt hours (kWh) in 1998, with total consumption being 173.34 billion kWh for the same year.
In 1997, there were 9.5 million phone lines in use in Australia, representing a 15 percent increase since 1993. For the same period (1993-97), subscriptions to cellular phone networks increased 667.3 percent, with a total of 3.8 million users in 1997. Thus, Australia has one of the world's highest rates of cellular phone use. Recent upgrades to the digital phone system have achieved almost total coverage across the country. In 1999 Australia had 709 Internet service providers.
Australia's mining sector is important to both Australia and the world. The mineral sector is the largest primary sector in the economy, accounting for 6.5 percent of the GDP but for more than 60 percent of export earnings. World-wide, Australia is the third largest producer of minerals and metals (not including coal and petroleum). About 80 percent of total mineral production is exported.
Australia is the world's leading producer of alumina and bauxite (both used in the production of aluminum), diamonds (mainly industrial, not gems), opals, and sapphires. The country is the world's second largest producer of lead and zinc; the third largest producer of gold and iron ore; the fourth largest producer of cobalt and uranium; the fifth largest producer of aluminum, coal, copper, nickel, and silver; and the sixth largest producer of salt. Australia is virtually self-sufficient in most minerals and metals. The main exception is oil, but Australia does produce 80 percent of its own needs, mainly from offshore wells. However, Australia does have large deposits of coal, natural gas, liquified petroleum gas, and uranium, all of which are exported.
Many minerals are widespread throughout the country, but others are concentrated in particular areas. Most mining takes place in remote or rural Australia. Bauxite, diamond, and iron ore production is concentrated in the tropical north. Coal, lead, and zinc are mined primarily in New South Wales and Queensland. Uranium production is limited to a few mines in the Northern Territory and South Australia. Every Australian state and the Northern Territory have substantial mining activity. Most of Australia's oil is found offshore. The northwestern coast of the continent and Bass Strait, between Tasmania and the mainland, are the principal locations for petroleum extraction.
Of Australia's total mineral and energy production, 40 percent consists of metals, 30 percent of petroleum group products, 25 percent of coal, and 5 percent of industrial minerals (such as construction materials, clay, and salt).
Minerals of particular interest include coal, which is the largest foreign exchange earner in the sector, accounting for 25 percent of the minerals sector and 15 percent of the country's total export earnings. Australia is the sixth largest producer of coal in the world, but the world's largest exporter, most of which is sold to Japan and other Asian countries.
Australia's uranium mining has been controversial, as much of it has been conducted in environmentally sensitive World Heritage areas (sites recognized by the United Nations Educational, Scientific and Cultural Organization [UNESCO] as having global cultural significance). Some groups have protested against Australia's mining of uranium because of its role in energy production. Australia itself does not use atomic power and operates only one experimental reactor. Australia does not sell uranium for use in weapons and maintains strict controls on exports. Foreign investment in Australia's uranium industry was allowed in 1996. Australia has the world's largest reserves of uranium, about 25 percent of world total.
With respect to the ownership of minerals and mineral rights, each Australian state owns resources in its own area, while the Commonwealth government owns resources in the territories and offshore. However, the Commonwealth government has given control over nonuranium minerals within the boundaries of the Northern Territory to the territorial government.
Mining in Australia has frequently led to conflict with Aboriginal groups over ownership of land and resources. Much of Australia's mining takes place in remote areas, including the Outback, where Aboriginal people form a high percentage of the population. Aboriginal people have protested against mining activity which disturbs or destroys sacred sites, causes environmental damage, and negatively affects the customs of Aboriginal communities. The proposed expansion of the Ranger uranium mine, at Jabiru in the Northern Territory, has been criticized by Aboriginal people living in the area. Australian legislation in the 1990s belatedly recognized Aboriginal concerns. In 1996, the Wik ruling of the High Court of Australia determined that mineral leases in Australia are subject to Aboriginal claims. The effect that this ruling will have on mining is still uncertain, but it will probably have little financial impact on the mining sector as a whole.
Foreign companies control a majority of mining, smelting, and refining in Australia. Many mineral companies are vertically integrated, in that they mine, refine, and distribute their products globally. Australia's largest mining company, Broken Hill Proprietary (BHP), is one of the world's largest mining companies. It operates in Australia as well as overseas. BHP's recent merger with the South African mining company, Billiton, made it one of the three largest mining companies in the world. The new company is known as BHPBilliton. Two other large mining companies, Anglo American (South Africa) and Rio Tinto (Great Britain), also have substantial investments in Australia.
The manufacturing sector has grown substantially since the 1950s, and while it remains a key sector in terms of its contribution to the GDP and employment, it also faces fierce competition from competing regional economies, especially those in Asia.
The relatively small population of Australia, and hence its small domestic market, has traditionally limited the development of certain types of manufacturing, such as sophisticated industrial equipment and electrical goods. Otherwise Australia is well equipped locally to produce most manufactured goods competitively. Key manufacturing industries in Australia are industrial machinery, chemical production, transport equipment, food processing, and steel production. Australia has the ability to manufacture most of its needs and can obtain most raw materials domestically. About one-fifth of Australia's workforce is employed in manufacturing industries, and the growth of the sector since World War II has been fairly uniform. Australia has its own automobile industry, although foreign companies have overall control and ownership. Large investors include General Motors, Ford, Toyota, and Mitsubishi. General Motors owns the Australian automobile company, Holden, that produces its own line of Australian cars.
The manufacturing sector in Australia has been stable and sound, with a broad spectrum of industries that have had little need for tariff protection or government subsidies. However, the rapid development of similar industrial manufacturing industries in Asia has created many cheaper import substitutes . High levels of industry regulation (such as union-driven working conditions) and smaller margins of trade have also put the manufacturing sector under stress. Many value-added goods, refined fossil fuels, and metal products are now produced more cheaply in Asia, reducing the competitiveness of Australia.
The manufacturing sector in Australia is located almost completely in the urbanized regions of eastern Australia, with the exception of considerable steel and primary industry production in the state of Western Australia. Working conditions are generally very good, with "award wages" (nationally legislated working conditions and minimum wages) and Occupational Health and Safety measures addressing workers' interests. In 1998, 54 percent of employees did not take any time off work because of a work-related injury or illness. The manufacturing industry is one of the most unionized employment sectors in Australia and has taken a leading role in promoting an improvement in working conditions.
The service sector contributes approximately 69.2 percent of the GDP and employs an estimated 73 percent of the labor force . The recent growth in tourism, retail , and financial services contributes to a steady increase in these numbers.
By the end of the 20th century, tourism had become Australia's largest "resource," surpassing coal in value. In 2000 approximately 4.6 million international tourists arrived in Australia, bringing an estimated US$9.02 billion into the country, a 73 percent increase from tourist revenues in 1993. International tourist arrivals for 2001 are estimated to increase substantially to 5.2 million. International tourists come mostly from New Zealand, accounting for 17 percent, and Japan, accounting for 15 percent. Tourists come from other regions as well: the Americas, 12 percent; Asia (except Japan), 26 percent; Europe, 24 percent; and others, 6 percent. Some 99 percent of international tourists in Australia arrive by air.
The Australian Tourist Commission (ATC) is responsible for promoting Australian tourism internationally. According to their recent policy statements, the ATC "positions" Australia differently in tourism markets, meaning that they present different aspects of Australia in different countries. For example, in Japan, Australia is promoted as "close, affordable, safe," and with "inspirational experiences of nature and culture." In other overseas markets, Australia is typically positioned as "the most naturally free-spirited and liberating country in the world" and as a destination for a regular vacation rather than as the "trip of a lifetime."
Australia's scenery, variety of landscapes, distinctive animals, beach culture, modern cities, and relaxed lifestyle are all promoted as reasons to visit the country. The relatively weak Australian dollar, which has steadily declined in value against the U.S. dollar, makes Australia an affordable destination, as foreign travelers increasingly receive more Australian dollars per unit of their own currency. The 2000 Summer Olympics held in Sydney was a major factor driving an increase in international tourism to Australia. Televised events revealed many aspects of the country to potential visitors. The success of Australian films, particularly the Crocodile Dundee series, and television programs such as Survivor II and The Crocodile Hunter have also sparked an interest in visiting Australia. International tourists are forecast to increase by an average of 7.8 percent per year until 2010.
Australia has a diverse range of retail enterprises, similar in complexity to that of the United States or Great Britain. Australian-owned national retailers are numerous but are considerably outnumbered by smaller retailers. Small businesses (those employing fewer than 20 people) accounted for 95 percent of total retail businesses but only 38 percent of total retail income in the period 1998-99. For the same period, large businesses (those employing more than 200 people) made up less than 1 percent of total retail businesses but generated 41 percent of total retail income. The remaining 4 percent of retail businesses and 21 percent of income was attributable to medium-size businesses (21-200 employees).
The larger retail businesses in Australia are mainly comprised of department stores and supermarkets, which contribute 99.6 percent of total income. At the end of June 1999, there were 98,289 retail businesses in the country, generating about US$90 billion in revenue. Since 1991-92, the number of retail businesses has increased by 18 percent, and employment in this sector has increased by 33 percent, with an annual sector-wide revenue growth rate of 5 percent. In the same period (since 1991-92) the operating profits of Australian retailers doubled.
Small businesses are most numerous and tend to dominate the total income for domestic repair and service industries, such as household equipment repair and motor vehicle services and maintenance. Small businesses also comprise the greater part of the total income for recreational goods, specialty foods, furniture, house-wares, and appliances. Small enterprises and the large national retailers alike are subject to "award conditions" which specify minimum wages and employment conditions. The retail industry, while having a very high union membership rate, is not controlled by unions, and the Commonwealth government and business alike support moves towards direct employer-employee workplace agreements.
Financial services is a growing sector in the Australian economy. With respect to commercial banking, the sector is dominated by 4 large private banks: the National Australia Bank, Commonwealth Bank (partially government owned), Westpac, and ANZ Bank. Together these 4 account for about 70 percent of market share and provide both retail and wholesale banking services (services to individuals and to companies). In an increasingly globalized economy, Australia's banks face international competition but have generally thrived. Australia's banking system has been consistently modernized by technological developments. For example, checks and checking accounts are no longer widely used, and Automated Teller Machines (ATMs) and electronic banking have replaced both the use of checks and in-person banking transactions.
Australia's financial services sector also includes many non-bank financial institutions. These include financial intermediaries such as building societies, credit unions, money market dealers, and finance companies. Building societies, similar to Savings and Loan companies in the United States, have generally been declining as they are no longer competitive and have been bought out by banks. Funds managers and trusts are other non-bank financial institutions. These institutions manage insurance funds, superannuation (retirement) funds, and real estate assets, among other matters.
Australia's central bank is the Reserve Bank of Australia, similar in concept to the Federal Reserve system in the United States. The Reserve Bank's functions include managing and issuing the currency, controlling the money supply, supervising the private banks, assisting the government in formulating economic policy, providing banking services to the government, managing the foreign exchange rate , and managing the Australian government's overseas financial holdings. The overall objectives of the Reserve Bank are to maintain the stability of Australia's currency, maintain full employment in the country, and ensure the economic prosperity of Australia.
Australia has no territories or colonies.
Australian Dollar (A$). One dollar equals 100 cents. There are coins of 5, 10, 20, and 50 cents, and 1 and 2 dollars. There are notes of 5, 10, 20, 50, and 100 dollars. An interesting feature of Australia's banknotes is that they are made out of thin plastic rather than paper.
Coal, wheat, gold, meat, wool, aluminum, iron ore, machinery, and transport equipment.
Machinery and transport equipment, computers and office machines, telecommunication equipment and parts, crude oil, and petroleum products.
GROSS DOMESTIC PRODUCT:
US$445.8 billion (purchasing power parity, 2000 est.).
BALANCE OF TRADE:
Exports: US$69 billion (f.o.b., 2000 est.). Imports: US$77 billion (f.o.b., 2000 est.).