PEST Analysis of Australia: A Brief Look into Politics, Economy, Society and Technology

This PEST analysis of Australia identifies critical impacts of four macro-environmental factors: politics, economy, society, and technology, although it can be extended to a PESTLE analysis if one chooses so. What happens in Australia easily affects other countries around the world, especially regarding politics and technology. You’ll want to continue reading to see how this information could impact you too.

Political factors affecting Australia: Transparency from political parties means happy citizens

Queen Elizabeth II remains the head of state for Australia. Although she’s the leader of the country’s constitutional monarchy, the Queen of Australia is just a figurehead; the governors represent her at the state level while the governor-general represents her at the federal level. The country’s figurehead (the Prime Minister) sits at the head of the Australian government.

The country is connected to several organizations, including the OECD, World Trade Organization, G20, and Commonwealth of Nations. Despite having a close relationship with the United States, Australia is frequently criticized by neighboring countries, including New Zealand and the UN. The former isn’t a fan of Australia’s deportation laws, while the latter sees the country as a failure for poor treatment of refugees and for not upholding human rights, including the rights of indigenous people.

The country’s business climate makes it a hot contender for investments. The political situation is rather stable, allowing investors to feel confident in their purchases. As for economic challenges, the country’s government addresses this, as well as policy changes. In fact, recent economic policy changes have driven Australia to be one of the top-rated countries in the region.

The government is rather transparent in their reasons for such changes, making it rather effective and highly regarded among citizens.

The economic climate of Australia: A easy choice for investors of land and companies

Australia holds the 13th spot for the largest economy worldwide. In 2017, the economy grew more than 2 percent. Although any growth is a good sign, the country expected more. Despite this, household incomes, business investments, and inflation will pick up sooner than later.

People are also opting for “pure investments”. This is an option for purchasing off-land property in the country for optimal prices. This is another promising area for investors; they use a “money down” payment to buy land early, then sell it later for a greater profit. The currency exchange rate favors outside countries, including America, which makes investing into Australian soil and businesses an easy choice.

Companies also use Australia as a headquarters for foreign companies. Primarily Asian operations. Australia remains a low-cost location for business relocations even today.

Problems stem from the company tax rates; it’s 30 percent. This doesn’t affect all businesses though; if a company has a turnover of less than $25 million, they qualify for the lower tax bracket.

Australia imports several key products, ranging from pharmaceuticals to copper to oil. These products are imported from countries all over the world. The cost was over $221 billion USD.

Social factors of Australia: Three types of social classes

Next up in the PEST framework is social factors. Australia has a smaller population than most other countries. As of 2018, it’s nearly 23 million. The average life expectancy differs by men and women; men average around 80 years and women 84 years.

Australia is multicultural and multiracial. Despite having a mass immigration policy adopted back in World War II, the discussion of refugees and immigration is a touchy topic for citizens.

There are three social classes in Australia: the working, middle, and upper class. What separates these classes? This is debatable. The upper class is typically 5-10 percent with property, capital, and ownership being their main sources of income. The middle class is the people who don’t have manual jobs. And more than 20 percent of the population identify as manual workers (the working class).

The upper class has expensive homes, cars, and clothes. However, the middle class can easily have these same objects. It may all just be mimicry though. For the middle class, this doesn’t hurt them much, but the working class can become indebted by trying to appear more wealthy. Classes are also identified by mannerisms, entertainment, and sports participation.

Australia puts emphasis on higher education. You can choose between universities and TAFE (institutions of technical and further education). Going to either of these institutions is also affected by your wealth and social status.

Technological influences of Australia: No more encryption

Australia is known for its technological innovations. It adopts new technology more frequently than countries in similar standing. The purchasing of new technology is expected to reach $65 billion this year.

There’s trouble regarding technological policies and research. Most research and development falls towards national research centres, while university researchers must struggle over funding resources. The government funds over 50 percent of all the research and development; industries contribute around 40 percent.

Then there’s the new law passed by government officials regarding encryption. The government has passed a controversial law to allow police and security to access anyone’s encrypted messages.

Encryption is supposed to hide information from anyone but the intended target or user. In this case, the government is forcing a “back door” in the name of “protection”. The government believes this will help solve cases relating to terrorism and criminal exploits. Users and security experts don’t agree.

The “back door” use isn’t confined to just police and governmental parties. Once created, anyone who wishes to gain access can exploit this back door for their own personal gain. As such, shared information becomes vulnerable to anyone and everyone.

To citizens, this is an invasion of privacy. It also means products using end-to-end encryption, like WhatsApp and Signal, are expected to change for this policy. People outside of Australia fear similar policies will be adopted into their home countries too.

Conclusion

Australia is a beautiful country with ample options for outside investors. Economic growth is on the rise, although slowly. Even though the country is quickly adaptable and transparent with policy changes, it doesn’t necessarily listen to the gripes of the people as demonstrated in this PEST example. The new law affecting encryption and data privacy is deemed a step back by most citizens and security experts. That won’t stop the change though, as the government feels it’s doing what’s best for the citizens.

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