Australia’s abundant and diverse natural resources attract high levels of foreign investment and include extensive reserves of coal, iron ore, copper, gold, natural gas, uranium and renewable energy sources. Australia also has a large services sector and is a significant exporter of natural resources, energy and food.
The Australian economy grew for 17 consecutive years before the global financial crisis. Subsequently, the Rudd government introduced a fiscal stimulus package worth over US$50bn to offset the effect of the slowing world economy, while the Reserve Bank of Australia cut interest rates to historically low levels. These policies – and continued demand for commodities, especially from China – helped the Australian economy rebound after just one quarter of negative growth. The economy grew by 1.2 per cent during 2009 – the best performance in the OECD – and by 3.3 per cent in 2010.
Australia was one of the first advanced economies to raise interest rates, with seven rate hikes between October 2009 and November 2010. The current Julia Gillard government is focused on raising Australia’s economic productivity to ensure the sustainability of growth, and continues to manage the symbiotic, but sometimes tense, economic relationship with China.