The Economy

Australia is one of the world's rich, developed countries. Most developed countries have become rich through the production and export of manufactured goods. Australia's wealth, however, has come chiefly from farming and mining.

Australia's economy was based largely on agriculture until World War II, when manufacturing began to develop rapidly. Since the latter part of the 20th century, manufacturing has provided the largest share of the national income. Workers engaged in manufacturing make up about 17 per cent of the labor force. Much of the post-war development of industry was made possible by large amounts of foreign capital, mainly from Great Britain and the United States.

Economic production in Australia
Economic activities% of GDP producedNumber of workers% of all workers
Finance, insurance, real estate, & business services291,486,50016
Community, government, & personal services202,639,70028
Trade, restaurants, & hotels142,363,00025
Manufacturing121,082,20011
Transportation & communication8599,6006
Construction7755,4008
Mining575,5001
Agriculture, forestry, & fishing3372,7004
Utilities275,3001
Total1009,449,900100
Agriculture

Agriculture in Australia is highly mechanized, requiring minimal human labor. Only about 4 percent of the country's workers are farmers. However, they produce nearly all the food the people need. Agriculture provides only 3 percent of Australia’s gross domestic product.

Farmland covers about 60 percent of Australia. However, most of this land is dry grazing land. Farmers cultivate crops on only about 10 percent of the farmland. But they use modern agricultural methods to make the cropland highly productive. They irrigate about 5 percent of the cropland. Although much of Australia's land is too dry for cultivation, it is well suited to livestock raising.

Australia's leading farm products are cattle and calves and wheat. Other important products include dairy products, fruit and nuts, vegetables, and wool. Australia is the world's largest producer and exporter of wool and a leading producer and exporter of beef, sugar, and wheat. Another rapidly growing industry is winemaking. All the Australian states produce wine, but New South Wales, South Australia, and Victoria produce the best vintages. Western Australia also has a developing wine industry In regions suitable for growing grapes, winemakers are turning old farms and orchards into vineyards to produce grapes for wine. The country's other major farm products include barley, chickens and eggs, cotton, nursery products, oats, rice, and sheep and lambs.(Roughly 60 per cent of the land is used for grazing; only about 2 per cent is devoted to crops.)

Sheep, the most numerous animals, are raised mainly for wool, though lamb, mutton, and skins are important. Australia is a world leader in number of sheep, in wool production, and in wool exports. New South Wales and Western Australia together raise more than half the country's sheep and produce more than half its wool. Normally, wool accounts for about one-tenth of the value of the nation's exports. Production occurs in many areas, but comes mainly from large farms, called stations, in the southeast.

Australia is also a leading producer of beef and dairy products, both of which, particularly beef, are exported in large amounts. The main beef-cattle area is a crescent-shaped belt west of the Great Dividing Range. Dairying is centered along parts of the east and southeast coasts, where rainfall is more plentiful. Queensland and New South Wales raise more than half of Australia's beef cattle. Victoria is the leading producer of dairy products.

Wheat is Australia's chief crop and a principal export. Farmers grow wheat in all areas of the country that have adequate rainfall and climate. But production is heavily concentrated in New South Wales and Western Australia. Oats and barley are also major grains. Because of the climatic range, many kinds of tropical and temperate fruits and vegetables are raised. Cane farming supplies the local market with sugar and yields a large surplus for export. Rice, tobacco, and cotton are also grown. Farms on the east coast of Queensland produce sugar cane, bananas, pineapples, and other crops that need a wet tropical climate. Fruit such as apples and pears are common in all the states. New South Wales and South Australia produce most of the country's oranges.

Irrigation has been developed in several regions; however, the irrigated area is small because of limited supplies of water. The most notable undertaking is the Snowy Mountains Hydroelectric Scheme in the Great Dividing Range. In addition to creating power, the project diverts water for irrigation from eastward-flowing streams westward to the Murrumbidgee and Murray river valleys. Artesian wells, called boresin Australia, are used in some parts of the dry interior, mainly for watering livestock.

Manufacturing

Australia's manufacturing industry is small by world standards, but well established and varied in output. Australia imports more manufactured goods than it exports. Consumer goods, such as processed foods, clothing, beverages, and household items, have long been produced in amounts sufficient to meet most of the nation's needs. But the nation has to import most of its producer goods—factory machinery, construction equipment, and other goods used in production.

Australia's technical and heavy industries developed rapidly after World War II, especially the late 20th century. Most of Australia's factories specialize in assembly work and light manufacturing. From these industries come such products as iron and steel, aluminum, heavy machinery, diesel locomotives, jet engines, motor vehicles, earthmoving machines, electronic equipment, plastics, drugs and other chemicals, metals, petroleum, coal, printed materials; wood and paper products; and transportation equipment. Many plants process farm products or minerals for export. New South Wales and Victoria are the chief manufacturing states, with about two-thirds of the country's factories and factory workers. Manufacturing is concentrated in or near Sydney, Melbourne, Brisbane, and Adelaide. Manufacturing provides about 10 percent of Australia’s gross domestic product. Many of Australia's manufacturing concerns have close financial and technical connections with leading corporations overseas, particularly in the United States and Great Britain.

Mining

Australia is rich in minerals, and mining plays a vital part in the economy. Most minerals of commercial significance are known to occur in Australia, and many are mined for domestic use. Some minerals are exported in large amounts. Since the mid 20th century, foreign corporations have greatly aided the development of mining. In 1975, the Australian federal government established a general rule that at least 50 percent of every major new mining operation in the country should be owned by Australian investors.

By the end of the 19th century, Australia was exporting large amounts of copper, gold, lead, silver, tin, and zinc. These minerals remained the chief products of the mining industry until the mid-20th century. During this time, geologists discovered huge deposits of bauxite, coal, and iron ore in Australia. They also discovered manganese, natural gas, nickel, and petroleum.

Australia has become one of the world's major mining countries. It ranks first in the production of bauxite, diamonds, lead, and zircon, and is a leading producer of coal, copper, gold, iron ore, manganese, nickel, silver, tin, titanium, and zinc. Nearly all the world's high-quality opals are mined in Australia.

By value, the leading minerals produced are coal, mostly bituminous coal; crude petroleum; iron ore; and bauxite. Coal, iron ore, and bauxite and alumina are major exports; Australia is the world's leading producer of bauxite and ranks among the leaders in the production of iron ore, coal, zinc, nickel, uranium, and gold. Most of the petroleum is both refined and consumed in Australia.

Other major minerals produced in Australia include lead, copper, silver, tin, and natural gas. Most of the world's titanium, zirconium, and thorium ores come from Australia. The country is a major producer of gemstones and leads the world in the production of diamonds, sapphires, and opals.

Western Australia, Queensland, and New South Wales are the leading mining states. Western Australia produces most of the nickel, iron ore, and gold and much of the bauxite. Queensland is the chief producer of bauxite, coal, copper, and silver. New South Wales leads in the production of lead and zinc. All the manganese comes from the Northern Territory. Most of Australia's tin comes from Tasmania.

Offshore fields along the northwest coast of Western Australia are Australia's main source of petroleum. Other petroleum producers include New South Wales and Victoria. Natural gas is produced in South Australia and the northwest coastal shelf of Western Australia. The country has the world's largest undeveloped deposits of uranium, which lie in the Northern Territory and South Australia.

Forestry and Fishing

Forests cover about 20 percent of Australia, mostly in the Eastern Highlands and moist coastal areas. The vast majority of Australia's forest trees are eucalyptuses. Industries use the wood of some eucalyptus species for making paper and such items as floorboards and furniture. But eucalyptus wood is too hard for most other purposes, including most types of housing construction. Therefore, tree farms plant imported species of softwoods. Monterey pines, which originally came from California, have become Australia's second most important timber trees, after eucalyptuses.

Although Australia is surrounded by water, its fishing resources are limited. Thousands of species of fishes live in the coastal waters, and Australia has developed a small but profitable fishing industry. The industry earns most of its income from the catch of shellfish, especially abalones, lobsters, oysters, prawns, and scallops. The fishing fleet also brings in a fairly large catch of mullet, salmon, trout, and tuna.

Tourism

Australia has a variety of tourist attractions. They include wildlife sanctuaries, sandy beaches, the Great Barrier Reef, the Australian Alps, Uluru, and numerous points of historical interest. More than 4 million foreign tourists visit Australia each year. Tourism aids the economy, especially the service industries, such as retail trade, restaurants, and hotels.

About half of Australia's visitors come from New Zealand and other Pacific islands, Japan, and Southeast Asia.

Service industries provide about three-quarters of Australia's jobs and make up more than two-thirds of Australia's gross domestic product—the total value of goods and services produced within the country annually.

Hospitals, schools, government agencies, stores, hotels, and restaurants are service industries. Also included in this category are banking, trade, transportation, communication, education, and tourism activities. Television stations are operated by both private companies and independent government agencies.

Transportation

Australia's railways are concentrated along the south and east coasts and link the principal cities. Few lines penetrate far into the interior, where settlement is sparse. Virtually all the trackage is owned and operated by the state and federal governments. Three different gauges (narrow, standard, and broad) make up the system. The transcontinental line is standard gauge—4 feet 8 inches (143.5 cm).

Roads and highways total about 500,000 miles (800,000 km). About a third of the system is hard-surfaced. Only one road and one railway cross the barren Nullarbor Plain in the south and connect eastern and western Australia.

Except for Fremantle, the port for Perth, the chief general-cargo shipping centers are state capitals—Sydney, Melbourne, Brisbane, and Adelaide. The busiest of these ports are those at Sydney and Melbourne. In addition to overseas trade, Australian ports handle a great deal of coastal shipping.

Several domestic airlines provide flights within Australia. Qantas Airways Ltd. is the main international carrier. Numerous foreign airlines also provide service to and from the continent through international airports, especially those at Sydney and Melbourne.

Trade

Farm products, minerals, and other raw materials are important to the nation's economy. They account for about half of export earnings. Manufactured goods account for about one-third of export earnings. More than three-fourths of Australia's imports are manufactured goods

Nearly 60 per cent of Australia's exports go to Asian countries, especially Japan, South Korea, and Singapore. Countries that export the largest number of goods to Australia include the United States, Japan, and Great Britain. Australia exports minerals, wheat, and fruit to the United Kingdom and other western European countries, but Japan is Australia's biggest customer. It especially buys coal, iron ore, and other minerals. China, Japan, and other Asian countries are major purchasers of Australian farm products, especially wheat. Japan is the leading buyer of Australian wool.

Countries that export the largest number of goods to Australia include the United States, Japan, and United Kingdom. The United States and Japan are Australia's chief source of producer goods, machinery and other goods used in manufacturing. The United States, in turn, imports large amounts of Australian beef, alcoholic beverages, motor vehicles, petroleum, and seafood.

Australia's basic currency unit is the Australian dollar, which is divided into 100 cents.