Australia

With a looming set of unaddressed structural issues, Australia falls into the middle ranks (rank 22) with respect to economic policy. Its score in this area has declined by 0.2 points relative to 2014.

After a coronavirus-driven recession in mid-2020, the economy bounced back robustly. Wage subsidies and extended unemployment benefits helped limit damage. Unemployment initially surged but fell back to low levels by late 2021. A balanced monetary policy helped sustain spending without being unsustainable.

Restrictions on overseas travel helped boost domestic demand. The effective immigration freeze helped keep unemployment low. Skill shortages remain a concern. The slowdown in Chinese growth and continued conflict with China have dampened future economic prospects.

Net federal debt has risen substantially due to COVID-19 spending, reaching around 45% of GDP. Low commodity prices and an aging population have helped generate a structural budget deficit. The moderate tax levels have contributed to low-quality public infrastructure. The tax system does little to produce ecological sustainability.

With a broadly content society despite high levels of inequality, Australia falls into the middle ranks with regard to social policy (rank 19). 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, net migration turned negative during the pandemic. The indigenous population remains badly marginalized, with life expectancies about 10 years below the country’s average.

Preschool spending is low in international comparison, and the high cost of childcare continues to be a problem for many families despite recent increases in subsidies. Student test results have been declining compared to other countries in the region. International student numbers plummeted during the pandemic, undermining university-system finances.

The healthcare system is generally of high quality, though waiting periods can be long in the public sector. The age of pension eligibility is being increased, and the pension system is deemed largely financially sustainable. COVID-19 support payments virtually eliminated poverty in 2020, but were phased out in 2021.

Emissions concerns and unaddressed infrastructural needs have left Australia scoring relatively poorly (rank 35) with respect to environmental policy. Its score on this measure has declined by 0.4 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. Some recent progress has been made toward a sustainable energy policy, but emissions-reduction policies have been very slow to emerge despite a 2050 net-zero target.

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. A new agreement with the U.S. and the U.K. may lead the country to embrace small nuclear reactors.

With an open, transparent electoral regime, Australia’s democracy falls into the upper-middle ranks (rank 18) in international comparison. Its score on this measure has declined by 0.5 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. Severe COVID-19 lockdown measures imposed by state and territory governments, including bars to entry by residents of other states, were ruled constitutional by the High Court.

Asylum seekers are processed offshore, denying them the rights accorded to citizens. There is no restriction on private funding of campaigns, but recently passed laws sharply limit political donations from foreign government entities.

Anti-discrimination laws are generally strong. Same-sex marriage was recently approved by parliament. Corruption is generally well controlled. New media laws require digital platforms to pay publications for content they link to or display. Ownership of traditional media is highly concentrated.

After a strong government response to the COVID-19 crisis, Australia falls into the middle ranks (rank 19) in the sphere of executive capacity. Its score on this measure has declined by 0.6 points relative to 2014.

The government office coordinates policy development, working closely with line ministries. The government reacted to the pandemic with swift and major policies, which it had no problem implementing. The lack of a Senate majority hampered the passage of other major policies.

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. While regulations tend to be enforced in an unbiased manner, their creation process is often heavily influenced by powerful interests. A new “regulator of the regulators” authority is being created to address this issue.

Despite declining public confidence in the political system, a well-developed legislative-oversight capability helps Australia score in the upper-middle ranks (rank 13) for executive accountability. Its score in this area has declined by 0.3 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. Funding for the privacy and data-protection office has been progressively increased in recent years.

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. Online news providers are reinvigorating the sector to some extent, but are also contributing to misinformation.

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.