Omari Gates
Australia's economy has been described as a 'two-speed economy', with some states experiencing growth and others facing recession. In 2024, Victoria was described as an economic basket case, with out-of-control debt, taxes, and energy prices. However, more recently, in 2025, Victoria has jumped to third place in economic rankings, showcasing its improved underlying economic activity. Tasmania, which has the lowest population growth, could face challenges in sustaining its current level of housing construction activity if population growth does not keep up. South Australia has been praised for its burgeoning industries and investment in renewable energy, positioning it as a leader in sustainable economic growth. As of 2025, Western Australia has been ranked as the best-performing state economy, leading in retail spending, relative unemployment, relative population growth, housing finance, and dwelling starts.
| Characteristics | Values |
|---|---|
| Worst-performing state economy | Victoria, according to the IPA State Economic Scorecard 2024 |
| Best-performing state economy | Western Australia, according to the CommSec State of the States report in 2025 |
| Best state for business | South Australia, according to the Business Council of Australia |
| Worst state for business | Victoria, according to the Business Council of Australia |
| Best state for population growth | Western Australia, according to the CommSec State of the States report in 2025 |
| Worst state for population growth | Tasmania, according to the CommSec State of the States report in 2025 |
| Best state for unemployment | South Australia, according to the CommSec State of the States report in 2023 |
| Worst state for unemployment | Not clear |
Explore related products
What You'll Learn
Western Australia: best performing state in 2024
Western Australia has been hailed as the best-performing state in the country in 2024, with its nation-leading resources sector being critical to the state and the entire nation. This is in stark contrast with Victoria, which has been described as an "economic basket case" due to its debt, taxes, and high energy prices.
Western Australia's strong performance is driven by several factors. Firstly, the state has experienced the strongest business investment in over a decade, with significant infrastructure investment from the WA Labor Government. This has resulted in a record number of jobs, with more than 1.6 million Western Australians employed, and a historic low unemployment rate of 3.4%. Secondly, Western Australia's economy is heavily export-oriented, contributing almost half of the nation's exports and generating nearly $260 billion in wealth for Australia. The state's exports include minerals, petroleum, agri-food, and specialised manufactured goods. Thirdly, Western Australia has the strongest population growth on record, with 94,000 new residents in a single year, which has further fuelled its economic growth.
The state's economic resilience is also evident in its relatively stable and affordable net debt compared to other states and territories. Western Australia's net debt as a percentage of Gross State Product is expected to remain unchanged at 9.7% by 2027-28, outperforming all other jurisdictions. This indicates the state's ability to manage its finances effectively.
While Western Australia's economy is thriving, it is important to acknowledge the challenges faced by other states, such as Victoria, which has struggled with economic downturns and rising costs impacting businesses and families. Nevertheless, Western Australia's performance in 2024 showcases the impact of state government decisions and their positive consequences for the state and the country.
Fireflies in Australia: Where to Find Them
You may want to see also
Explore related products
Victoria: economic basket case in 2024
Victoria has been labelled an "economic basket case" in 2024, with a range of issues causing concern for the state's economic future. While the state has shown some positive signs of economic growth and resilience in recent years, it now faces a number of challenges that could impact its economic trajectory.
One of the key issues is Victoria's public finances, with the state facing spiralling debt and high taxes. This has been exacerbated by the rising cost of living crisis across Australia, which has seen stagnant wages fail to keep up with increasing costs. Victoria's energy prices, in particular, have been highlighted as a problem, impacting the state's business environment and making it an unattractive place for companies to operate.
The state has also experienced a decline in its manufacturing sector, which has historically been a significant contributor to its economy. This decline has resulted in job losses and a reduction in economic output. In 2012, the Victorian Government cut 10% of all public service jobs, further compounding the issue.
Victoria's population growth has also slowed, which could impact the demand for housing. This may lead to challenges in sustaining the current level of housing construction activity, affecting economic growth and stability. The state is also facing shortages in key areas, including housing, health, infrastructure, and education, which are putting additional strain on its resources.
Despite Victoria's economic challenges, some of its economic indicators have shown promise. In 2023, Victoria experienced a remarkable rise in economic rankings, leaping from fifth to first place. This improvement was driven by strong upturns in relative economic growth and construction work done. The state's retail sector has also demonstrated vigorous activity, reflecting consumer confidence and spending power.
Movie Magic: Where Australia's Film Industry Thrives
You may want to see also
Explore related products
South Australia: best state to do business
Australia's economy has been described as a "'two-speed economy', with Western Australia and the Northern Territory, which are heavily dependent on mining, experiencing significant downturns in GDP, while eastern states like New South Wales and Victoria returned to growth. In 2024, Victoria was named the worst state to do business in, particularly for opening a new cafe, due to its uncompetitive property tax settings, payroll taxes, and business licensing requirements.
In contrast, South Australia has been hailed as the best state to do business, offering the most favourable regulatory environment in the country. Here are some reasons why South Australia stands out as the top state for businesses:
Lower Taxes and Charges
South Australia boasts lower payroll taxes, property charges, and business licensing requirements. This makes it an attractive destination for businesses looking to expand or establish their operations, as they can benefit from reduced operating costs and increased profitability.
Stable and Business-Friendly Environment
The state is led by a pro-business Labor government, committed to working in conjunction with businesses when contemplating policy changes. This provides a stable and predictable investment environment, reducing the uncertainty that businesses often face in other states.
Efficient Urban Planning
South Australia's urban planning system is highly efficient, taking into account the pace at which development applications are assessed. This streamlined process enables businesses to navigate the necessary steps for establishing or expanding their operations more effectively.
Strong Economic Resilience
South Australia has demonstrated strong economic resilience, positioning itself closely behind states like Victoria and ahead of New South Wales and Queensland. Its burgeoning industries, particularly in renewable energy, showcase its commitment to sustainable economic growth.
Lowest Unemployment Rate
In September 2023, South Australia reached an all-time low unemployment rate of 3.7%38.9% below the average of the past decade. This indicates a robust job market and a thriving economy, making it an attractive destination for businesses seeking a talented workforce.
While South Australia excels in these areas, it's important to note that it has among the most restrictive rules for retail trading hours, dictating when businesses can and cannot open. However, this hasn't deterred businesses from choosing South Australia as their preferred location, thanks to the numerous advantages the state offers.
Exploring Switzerland's Size Compared to Australia
You may want to see also
Explore related products
Tasmania: second-best state to do business
Australia's economy is characterised as a "
Tasmania has been ranked as the second-best state to do business in Australia, according to the Business Council of Australia's (BCA) leaderboard. While Tasmania has the lowest population growth, which could impact future housing demand, it has taken the number one ranking in equipment spending.
Tasmania's position as the second-best state to do business is due to its competitive tax rates and streamlined regulatory framework. The state has the lowest payroll tax rate for large employers, which is a significant advantage for businesses with a large number of employees. Additionally, Tasmania offers favourable stamp duty and land tax rates, reducing the tax burden on businesses and making it an attractive option for companies looking to expand or establish their operations.
Furthermore, Tasmania has fewer licensing and permit requirements compared to other states, making it easier for businesses to set up and operate. The state's urban planning system is also efficient, with development applications being assessed promptly. This streamlined approach to regulations and permits makes Tasmania an ideal location for businesses looking for a hassle-free environment in which to operate.
While Tasmania excels in certain areas, it is important to note that overall, its economy is held back by lower rankings in other indicators. However, its strong performance in key areas, such as equipment spending and competitive tax rates, solidifies its position as the second-best state to do business in Australia.
Changing Australia: Laws that Need Reforming
You may want to see also
Explore related products
Queensland: rising up the ranks
Queensland has risen up the ranks in the latest CommSec State of the States report, claiming second place as the country's second-best-performing economy. This marks a significant improvement for the state, which previously held third place in the rankings.
Queensland's rise can be attributed to its solid performance across the eight key economic indicators assessed by the report. Notably, the state achieved first or second place in five of these indicators, showcasing its well-rounded economic strength.
One of Queensland's standout achievements is its top ranking in home loans, reflecting a robust housing market within the state. This is particularly impressive given the challenges faced by other states, such as Tasmania, in sustaining housing construction activity due to low population growth.
Queensland's ascent in the economic rankings is even more remarkable considering the overall economic landscape in Australia. The country has been facing economic headwinds, with rising interest rates and inflation impacting households and businesses. However, Queensland's resilience in the face of these challenges underscores the robustness of its economy.
Looking forward, Queensland is well-positioned to continue its upward trajectory. Its diverse economic strengths provide a solid foundation for sustained growth, and it will be interesting to observe the state's economic performance in the upcoming quarters. Queensland's rise serves as a testament to its dynamic growth and stability, attracting businesses and individuals seeking new opportunities.
Skype Calling Rates in Australia: What's Free, What's Not
You may want to see also
Frequently asked questions
As of January 2025, the Northern Territory ranks last in economic performance. However, as of December 2024, Victoria was described as an "economic basket case", with "out-of-control debt, taxes, and energy prices".
As of January 2025, Western Australia is the best-performing state economy, ranking first on three economic indicators.
The CommSec State of the States report determines the best and worst economies by tracking eight key economic indicators: economic growth, unemployment rates, construction activity, retail spending, relative population growth, housing finance, dwelling commencements, and equipment investment.
South Australia has been ranked as the best state to do business, with Tasmania coming in second.
