Comparing Economies: Australia vs Indonesia Flashcards
Economic growth: Australia (x3)
- Slowly growing economy
- Experienced solid growth in the 2000s mining boom
- Lifted Australia’s terms of trade by 30%
- Stimulating national income and growth in output and exports.
- Below average at 1.9% in 2019-2020 as it transitioned to non mining sources of growth
Economic growth: Indonesia (x3)
- Rapid economic growth since IMF bailout package to restore market confidence
- Reliant on agriculture, mining and tourism for domestic income and export income
- Expanded its industrial and service output, increased its exports to the rest of the world and implemented reforms to open its economy to foreign investment, causing rapid growth
HDI: Australia (x4)
- 0.938, ranking 8th, because of access to food, housing, water, health, education and a clean and healthy environment.
- Average life expectancy of 84 years
- Mean schooling of 13 years
- GNI per person of $51,760 in 2019
HDI: Indonesia (x6)
- 0.707, ranking 111th, because of poor hygiene including, poor air quality, tobacco, drugs and mental health.
- Improved significantly from 124th in 2011 due to the continuing reduction in poverty in Indonesia.
- Between 1980 and 2018, Indonesia’s HDI rose from 0.4022 to 0.707 indicating a substantial improvement in the quality of life and a general fall in income poverty
- Average life expectancy of 72 years
- Mean schooling of 9 years
- GNI per person of $4,050 in 2019.
Income distribution: Australia (x4)
- 35.8% Gini coefficient
- Top 10% of the population have 27.8% of Australia’s wealth.
- Made more equal through the operation of the systems of progressive taxation and social welfare payments.
- A significant proportion of progressive income tax revenue is used by the Australian government to finance social welfare payments to low-income earners
Income distribution: Indonesia (x3)
- 38.1% Gini coefficient,
- Top 10% of the population have 29.5% of Indonesia’s wealth.
- The government is relatively inefficient at reducing income inequality with the systems of progressive taxation and social welfare in Indonesia being much less robust and generous as low-income earners are mainly reliant upon the support of family, friends and local communities for income support if they experience income poverty
Environmental sustainability: Australia (x4)
- Ranks 13th on the YEPI
- 1st on air quality rank
- 25th on sanitation and drinking water rank
- High level of environmental quality despite being a highly urbanised society with 86% of its population residing in its major capital and regional cities in 2018
Environmental sustainability: Indonesia (x4)
- Ranks 116th on the YEPI
- 142nd on air quality rank
- 125th on sanitation and drinking water rank
- Indonesia’s large population and rapid industrialisation have led to a deterioration in the quality of the environment and the depletion of agricultural lands
Role of government in healthcare: Australia (x5)
- Provides universal health care through Medicare, as well as allowing private insurance and hospitals to operate.
- Focus is on lifestyle diseases such as heart disease and diabetes, which are common for advanced economies.
- Budgeted $93.7b to health care which represented 13.9% of total budget outlays.
- Provides a private health insurance rebate, encouraging the take up of private health insurance
- Medicare since 1984
Role of government in healthcare: Indonesia (x5)
- Health expenditure represented 3% of GDP in 2017 and was directed at conducting universal immunisation programmes amongst infants to prevent common diseases.
- Recently, more resources are allocated to reducing MMR and IMR
- Recently have introduced universal healthcare, allowing private insurance and hospitals to operate.
- Universal healthcare introduced in 2014
- 5% of budget spending is towards healthcare
Role of government in education: Australia (x4)
- Expenditure makes up 5-6% of Australia’s GDP
- Global primary and secondary education is provided by state and territory governments.
- Universities are funded by the Australian government through an income-contingent loan scheme.
- Well-regarded education internationally, with around 1.5 million overall students in tertiary education and with 720,000 international students
Role of government in education: Indonesia (x4)
- Expenditure makes up 4% of Indonesia’s GDP.
- The district level governments provide the majority of primary and junior secondary education in Indonesia
- The private sector’s role increases at higher levels of education, and the central government retains jurisdictional power over higher education.
- Indonesia’s system has had improved access in recent years, with more students attending, with attendance rates around 93%, improving from 89% in 2005.
Role of government in welfare payments: Australia (x4)
- Social welfare makes up over 10% of Australia’s GDP.
- Allocates 8% of its budget to social welfare.
- Government provides a well targeted, comprehensive and means tested welfare system with 33.9% of total government expenditure allocated to social security and welfare in the 2020-21 budget.
- Variety of payments for social welfare recipients including the Age Pension, Carer Payment
Role of government in welfare payments: Indonesia (x2)
- The Indonesian government spends less than 1% of GDP on payments in 2018.
- 24.2% of Indonesia’s population was estimated to be living on less than US$3.20 per day and 56% living on less than US$5.50 per day.
Unemployment: Australia (x4)
- Moved between 5 and 6% in the last 10 years
- Unemployment rate fell to 4.2% in 2007-2008
- 5.3% of the workforce in Australia
- Forecast to rise to 6.8% in December
Unemployment: Indonesia (x5)
- Unemployment rose to 20% of the workforce after the Asian Crisis in 1997.
- Steady decline between 2006-2012 amid the 2000s commodities boom, causing a significant GDP growth rate.
- New jobs were created, pushing down the nation’s unemployment rate by 1%.
- Indonesia fell to an average of 3.9% in 2019-2020 due to sustained annual economic growth around 5.2%,
- Unemployment rate rose in 2020 to 6.2% due to COVID
Employment: Australia (x3)
- Structure of employment reflects a highly specialised economy with 87% of employment concentrated in the service sector, alongside an average of 5.1% of the workforce which are engaged in primary industry and 7.9% in manufacturing.
- Labour force growth rate of 1.6%
- Service sector comprises of 62.7% of GDP with 78.8% of the working population in the service sector.
Employment: Indonesia (x5)
- Services sector has contributed to employment growth in Indonesia, having created almost 15 million jobs over the last decade, and employing half of the Indonesian workforce.
- Agriculture is the largest employer with an average of 29.2% of employment in the primary sector,
- 21.4% of Indonesian employment was in manufacturing and 49.4% in services
- Labour force growth rate of 1.8%
- Agricultural sector comprises of 27.73% of Indonesia’s working population, contributing to 14.43% of GDP.