The virus was suppressed for a period but cases have risen in recent months

The initial downturn was relatively mild

Fiscal policy has been supportive

Faster progress in reducing carbon emissions is needed

GDP per capita had slowed pre-pandemic

A resurgence of the virus has been accompanied by a faster pace of vaccinations

Confidence has recently fallen back and there are divergent trends across sectors

The Asia-Pacific is the core bilateral trading region

The labour market shock was abrupt but employment rebounded after the initial lockdown

Lower wage workers experienced more adverse employment outcomes

Market interest rates have declined

Underlying inflation has undershot the target band for a prolonged period

Additional fiscal support was significant and front loaded

A multitude of policy measures were employed to fight the pandemic

Fiscal stability can be restored in the short-term

There are long-term fiscal pressures from ageing

Unemployment benefits remain very low by international standards

The tax base is skewed towards income taxation

The GST rate is low and there are significant exemptions

Productivity and real wages have stagnated

Small young firms were hard hit at the onset of the pandemic

Young firms have been the drivers of employment growth

Firm entry rates have slumped and those that do enter are larger

A higher share of young firms would considerably boost employment

The licensing system and regulatory complexity are ripe for reform

The pace of entrepreneurialism has been weakest in digitally intensive sectors

Australia ranks among peer countries in indicators of corruption

Australia is in line with other comparable countries on tax transparency

Emissions will need to decline faster to achieve net zero emissions by 2050

Progress in reducing net emissions has varied across sectors

Carbon emissions are priced lower than in most other countries

Green growth indicators

Australia’s financial system has grown dramatically in recent decades

Around half of superannuation funds’ assets are invested in equities

The banking system is relatively concentrated

Stronger capital ratios supported banks’ resilience

The Term Funding Facility provided a large amount of low-cost funding for banks

Most deferrals from the initial phase unwound at an orderly pace

There have been far fewer business insolvencies than usual

Australia’s insolvency laws have become more friendly to entrepreneurship

Asset quality has only deteriorated modestly

Household debt and bank exposures to real estate are high

Macroprudential policies could be tightened further

Access to finance is a barrier for innovative firms and innovation

Obtaining finance has become more difficult

Lending is highly skewed towards households

The interest rate spread on SME loans is relatively wide

The major banks have remained entrenched

The stock market is sizeable and liquid

Public equity raising has been comparatively strong

Small IPOs are relatively common

Venture capital is low and has not recovered since the global financial crisis

Alternative finance is still in its infancy

Green bonds have grown rapidly

Overall levels of financial knowledge and inclusion compare well

Financial knowledge is strongly related to demographic characteristics

Financial literacy is a little above the OECD average with wide dispersion

Financial inclusion, knowledge and resilience are lower for Indigenous Australians