Australia
Regional economic trends
Employment and unemployment rates in regions
In Australia, regional disparities in unemployment rates are moderate compared to other OECD countries. While in South Australia 4.4% of the working force was unemployed in 2022Q2, the share was 3% in Canberra region (ACT).
Meanwhile, the difference in employment rate between the regions with the highest (Northern Territory) and lowest (Tasmania) employment rates reached 12 percentage points in 2022. This places Australia among the top 10 OECD countries in terms of regional disparities in employment.
Note: Harmonised employment and unemployment rates, aged 15 and over. The OECD median corresponds to the median employment rate in large regions.
Source: OECD (2022), “Short-term regional statistics”, OECD Regional Statistics (database)
The first year of COVID-19 on GDP per capita
The first year of COVID-19 resulted in a increase in GDP per capita in half of Australian regions. Northern Territory, a region with a GDP per capita 27% above the national average (60 479 vs. 47 731 USD PPP), experienced the largest decrease in GDP among Australian regions, of approximately -7%.
Note: GDP per capita is measured in constant prices and constant PPPs, reference year 2015. Constant prices are calculated using national deflators. The OECD median corresponds to the median decline in GDP per capita observed across OECD large regions over the period.
Source: OECD (2022), “Regional economy”, OECD Regional Statistics (database)
Trends in regional economic disparities in the last decade
Differences between Australian regions in terms of GDP per capita have remained relatively stable over the past nine years, with the richest 20% of regions reporting a GDP per capita 1.5 times higher than the poorest 20% of regions.
Note: The GDP per capita of the top and bottom 20% regions are defined as those with the highest/lowest GDP per capita until the equivalent of 20% of the national population is reached. A ratio of 2 means the richest regions have a GDP per capita twice as large as the poorest regions. The indicator is calculated using large regions, except for Latvia and Estonia, where small regions are used instead. Irish GDP underwent an upwards revision in 2016. Care is advised in its interpretation.
Source: OECD (2022), “Regional economy”, OECD Regional Statistics (database)
Productivity trends in the last decade
Between 2010 and 2019, Canberra region (ACT) and South Australia experienced the highest and lowest productivity growth in Australia, respectively. Canberra region (ACT) saw a labour productivity increase of 2.3% per year, above the OECD average of 0.9%1. During the same period, South Australia experienced more modest growth in measured labour productivity, averaging 0.2% per year.
Less than half of Australian regions experienced a decline in labour productivity between 2019 and 2020. Western Australia experienced the largest decline, with a drop of 13.0%
Note: Regional Gross Value Added (GVA) per worker, in USD, constant prices, constant PPP, base year 2015.
Source: OECD (2022), “Regional economy”, OECD Regional Statistics (database)
Well-being, liveability and inclusion in regions
Regional well-being
Australia faces stark regional disparities across six well-being dimensions, with the starkest disparities in terms of community, health and life satisfaction.
Note: Regional indices provide a first comparative glance of well-being in OECD regions. The figure shows the relative ranking of the regions with the best and worst outcomes in the eleven well-being dimensions, relative to all OECD regions. The eleven dimensions are ordered by decreasing regional disparities in the country. Each well-being dimension is measured by the indicators in the table below.
Relative to other OECD regions, Australia performs best in the housing dimension, with all of Australian regions lying in the top 20% of OECD regions.
The top 20% of Australian regions rank above the OECD median region in 13 out of 14 well-being indicators, performing best in terms of disposable income per capita and rooms per person.
Note: Regional well-being indices are affected by the availability and comparability of regional data across OECD countries. The indicators used to create the indices can therefore vary across OECD publications as new information becomes available. For more visuals, visit https://www.oecdregionalwellbeing.org.
The digital divide
Fixed Internet connections in Australian cities and rural areas deliver speeds significantly slower than the OECD average (-42% and -50%, respectively). This gap (8 percentage points) is smaller than in most other OECD countries.
Note: Cities and rural areas are identified according to the degree of urbanisation (OECD et al. 2021). Internet speed measurements are based on speed tests performed by users around the globe via the Ookla Speedtest platform. As such, data may be subject to testing biases (e.g. fast connections being tested more frequently), or to strategic testing by ISPs in specific markets to boost averages. For a more comprehensive picture of Internet quality and connectivity across places, see OECD (2022), “Broadband networks of the future”.
Source: OECD calculations based on Speedtest by Ookla Global Fixed and Mobile Network Performance Maps for 2020Q4.
The average speed of fixed Internet connections is below the OECD average in all Australian regions. Within the country, residents of New South Wales, Victoria and Northern Territory experience the fastest connections.
Relative poverty rates
In Australia, relative poverty rates2 range from 11% to 26% across regions. This 15 percentage point difference is less pronounced than the average difference observed across the 29 OECD countries with available data (16 percentage points).
Note: The OECD median gives the median relative poverty rate observed in a sample made of 326 large regions (from 28 countries), and 28 small regions (from Denmark, Lithuania and the Slovak Republic). Data corresponds to 2020 or the latest available year.
Demographic trends in regions and cities
Dependency rate
The elderly dependency rate3 in Australia is also lower than the OECD average (26.8 %) in most regions, ranging from 34.2% in Tasmania to 12.9% in Northern Territory.
Population in cities
Between 2010 and 2020, all cities in Australia experienced a rise in population. Population growth ranged from 0.9% per year in Greater Adelaide to 2.4% per year in Sunshine Coast.
Note: Cities refer to functional urban areas (Dijkstra, Poelman, and Veneri 2019). Population counts for the functional urban area are aggregated from administrative, municipal-level, data.
Over the past decade, the population has grown the most in Australian cities with more than 1.5 million inhabitants. Cities with 100 000 to 250 000 inhabitants have seen their population grow, on average, but to a lesser extent.
Environmental challenges in regions and cities
Greenhouse gas emissions in regions
Since 1990, production-based greenhouse gas emissions have increased in all Australian regions. Northern Territory (89%) and Victoria (15%) experienced the largest and lowest increase in emissions, respectively.
On average, Australian regions increased their emissions by 0.98% per year between 1990 and 2018. This is below the 2.14% yearly reduction rate needed to reach the Australia target of a 43% reduction in emissions by 2030, with respect to 2005 levels.
Note: Bubbles are proportional to per capita greenhouse gas emissions, not to the overall level of greenhouse gas emissions in the region.
Source: OECD calculations, based on the Emissions Database for Global Atmospheric Research (European Commission. Joint Research Centre. 2019).
In 2018, greenhouse gas emissions per capita in Australia were largest in Northern Territory, Western Australia and New South Wales. Power accounts for the largest share of greenhouse gas emissions in Western Australia and New South Wales, while the transport sector accounts for most emissions in Northern Territory.
Note: Regions with low population counts may rank high in greenhouse gas emissions per capita while contributing relatively little to overall emissions in the country.
Urban heat island effect
In Australian cities, the difference in temperature between cities and their surrounding areas (i.e. urban heat island intensity) reaches 1.7 degrees Celsius (°C). The largest effect is observed in Greater Sydney and Greater Darwin, two cities that are, on average, 5.6°C and 3.8°C warmer than their surrounding areas, respectively.
Note: The Urban Heat Island Intensity (UHI) index is defined as the difference in land surface temperature between built-up areas and non-built-up areas within functional urban areas. This index can be affected by the type of vegetation and climate in non-built-up areas.
Source: OECD calculations, based on land surface temperature data from NASA’s Moderate Resolution Imaging Spectroradiometer (MODIS) (Wan, Hook, and Hulley 2021a, 2021b)
References
Source of administrative boundaries: © OECD, © EuroGeographics, National Statistical Offices, © UN-FAO Global Administrative Unit Layers (GAUL)
Footnotes
International comparability in 2019 and 2020 is limited because of methodological differences in the calculation of employment counts during the height of the COVID-19 economic crisis.↩︎
The relative poverty rate gives the share of people – as a % of the regional population – with an income below the relative poverty line (60% of the national median income).↩︎
The elderly dependency rate compares the number of elderly people at an age when they are generally economically inactive (i.e. aged 65 and over), to the number of people of working age (i.e. 15-64 years old).↩︎