Monita Pesumal takes a sneak peek into the only one nation, one continent economy in the world

Australia has been consistently ranked the world’s 14th largest economy. This is primarily due to its efficient state sector, which facilitates the nation’s high growth rates. The country’s competitive business environment has benefitted from low inflation, and the flexibility of its diverse multicultural labour force whose ethnicity ranges from Chinese and Vietnamese, to Persian and Lebanese.

The continent also regularly ranks as one of the best places in which to live as measured by global incomes, human development, education and indices over time.

Like the rest of the world, Australia has not had it easy this year. During the Australian bushfire season of 2019/20, it was widely reported that over 18.6 million hectares were burned to the ground. By the first week in March, the fires had destroyed over 5,900 buildings including 2,779 homes and killed at least 34 people.

Dubbed the ‘black summer,’ the fires were estimated to have killed one billion animals and driven many endangered species to extinction. The cost to the Australian economy of this devastating bushfire season reportedly surpassed AUS$ 2 billion. This figure includes direct costs to fire affected regions from lost tourism, and the retail and agricultural sectors.

As the economy was coming to grips with and reeling from bushfire season, in came the coronavirus pandemic like a tsunami. COVID-19 was first confirmed in Australia in late January.

The government took the pandemic seriously from its inception and put extreme measures in place to flatten the curve. These included a ban on travellers from high-risk countries, closure of borders to noncitizens, and shutting down the likes of movie theatres and bars, as well as schools.

Australia initially contained its coronavirus outbreak so well that it was hailed as a success story. Nearly 5.4 million tests had been carried out by 18 August, resulting in nearly 24,000 cases and 438 deaths. But following a new wave of cases, lockdowns are in force once more especially in Victoria.

It’s been almost 30 years since Australia last experienced a recession and nearly a decade from when the country recorded a contraction of GDP. This was back in 2011 during the Queensland floods and Cyclone Yasi.

In March, the Australian Bureau of Statistics reported that the economy had contracted by 0.3 percent. According to Treasurer of Australia Josh Frydenberg, this was mainly caused by a decrease in household income and consumption. Households make up roughly 56 percent of the economy so when our mates down under stop spending, their economy is hit hard.

But Australia is not alone in this predicament if growth contractions of 9.8 percent in China, 5.3 percent in France, 2.2 percent in Germany, two percent in the UK and 1.3 percent in the US are any-thing to go by.

The fact that the Australian economy only contracted by 0.3 percent bears testimony to its resilience. Indeed, the IMF has predicted that the global economy will contract by three percent this year, which is worse than when the 2007/08 global financial crisis took the world by storm.

Of course, the continent is rich in natural resources such as coal, iron ore, silver, copper, zinc, diamonds, uranium and gold. Mining accounts for 54 percent of Australia’s export revenue, making it one of the largest economic sectors. It also employs a mammoth 130,000 people. Coal is mined in every state, making Australia the world’s leading exporter of coal.

Together with dairy farming, agriculture and livestock are also primary industries in the world’s largest island. Australia is the world’s fourth largest exporter of wine (grown in the temperate climates of Hunter Valley, Margaret River and Clare Valley) after France, Italy and Spain, and exports contribute three billion dollars annually to the economy.

Last year, Australia exported wine to 120 markets with Asia continuing to be one of growth. The country’s key wine consuming markets were China, the US, the UK, Canada and Singapore.

Australia’s sandy beaches, the outback, rainforests, the Great Barrier Reef and the Gold Coast, and sports tourism – particularly Australian rules football, rugby and cricket – were responsible for combined tourist arrivals of 10 million in 2019.

In a surprising twist, a candidate from Australia’s opposition claimed victory in a close by-election viewed as a referendum on Prime Minister Scott Morrison’s handling of the bushfires and coronavirus pandemic.

Kristy McBain of the centre-left Labor Party claimed a narrow win over Fiona Kotvojs of Morrison’s Liberal Party in the electorate of Eden-Monaro. The by-election was triggered by the resignation of Labor MP Mike Kelly.

At the beginning of 2020, Morrison was one of the most unpopular people in the country if not the world. His approval ratings crashed to a mere 37 percent. But today, according to Newspoll, he is Australia’s most popular prime minister in a decade with a rating of 68 percent.

As the economy was coming to grips with and reeling from bushfire season, in came the coronavirus pandemic like a tsunami