Australia enjoys a unique position in the Southern hemisphere. It has a long and rich history, given its multicultural society. Australia was a British colony until 1901 and remains a Commonwealth nation till date. Australia has six states and two territories. The levels of Government are the federal (commonwealth), state and local. The federal legislature consists of a 76-member upper house and a 150-member lower house. The Prime Minister (Head of Government) is chosen by the lower house and is always the head of the leading party or coalition. The major political parties in Australia are the Liberal Party, Labor Party, National Party and Australian Greens.
Until the 1970s, foreign investment in Australia was largely regulated. In 1975, the Government decided to deregulate foreign exchange and reduce tariffs to integrate Australia with the global economy. The tariff rates have fallen from 7% to less than 1% over the last 30 years. The fall in tariff rates has resulted in an increase in both merchandise imports and exports.29 In the 1980s, the Australian dollar was floated resulting in tariff reductions flowing throughout the economy.
As a consequence of economic liberalization, overall employment rate in Australia rose by 72% between 1986 and 2016, with growth rates varying across sectors. While employment in the mining and services sectors grew, employment in agriculture and manufacturing sectors fell in the 30-year period.
In the mid-2000s, the global demand for commodities such as iron ore, coal and natural gas increased dramatically, whereas the supply of these commodities fell short. This resulted in a sharp increase in prices, mostly driven by rapid urbanization and development in China and other emerging economies.
This period of extraordinary rise in prices known as the Mining Boom lasted till around 2011-12. During this period, investment in mines and mining activities surged, employment increased and overall demand in the Australian economy showed a significant upward trend.
The end of the economic boom resulted in a drastic decline in mining investment, though net service exports such as tourism, education and business service exports had expanded over time.
29 Australian trade liberalization by the Centre for International Economics, Australian Department of Foreign Trade and Affairs, October 2017