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PESTEL analysis of Australia

PESTEL analysis of Australia

This detailed PESTEL analysis of Australia aims to address some of the political, economic, social, technological, environmental, and legal factors that affect Australia today. Australia is one of the best countries to live in the world. It is also a powerful country and plays a considerable role in the global economy and politics.


Political environment in Australia

Australia is a constitutional monarchy with Charles III (the King of the United Kingdom and the other Commonwealth realms) as the head of state. The King of Australia is represented by the Governor-General at the federal level and by the Governors at the state level. The Prime Minister is the head of government of Australia.


Canberra is the capital of Australia and Sydney is the largest city in the country. The total area of Australia is 7,741,220 square kilometres that makes it the 6th largest country in the world (O’Neill, 2023). The neighbouring countries are Papua New Guinea, Indonesia, East Timor, the Solomon Islands, Vanuatu, and New Zealand.


Australia is a member of the Commonwealth of Nations, OECD, G20 and the World Trade Organisation. It maintains a very close association with the United States. It has a safe and stable political environment.


However, the country drew a lot of criticisms over a number of issues in the past. For instance, its deportation laws were criticised by Justice Minister of New Zealand. Similarly, the UN criticised Australia for its failures in areas such as the protection of human rights, Indigenous rights, and the treatment of refugees.


Economic environment in Australia

The next element to address in the PESTEL analysis of Australia is the economic environment. Australia is the 13th largest economy in the world.  Its GDP is expected to reach $1571.00 billion US dollars by the end of 2023 (Trading Economics, 2023).


All companies in Australia are subjected to a federal tax rate of 30% on their taxable income. However, small businesses pay a reduced tax rate of 25% (PwC, 2023). Individual tax rates vary depending on the income of the individuals.


Australia is one of the wealthiest countries in the world, with a strong and vibrant economy. It is a major exporter of commodities, including minerals, agricultural products, and natural gas. It is also a major importer of consumer goods, technology, and services.


Vehicles, machinery, mineral fuels including oil, refined petroleum, delivery trucks, electrical machinery and equipment, pharmaceuticals, medical apparatus, precious metals, plastics, and furniture are some of the key imports of Australia.


On the other hand, iron ore, gold, coal, natural gas, beef, wheat, financial services, educational services, and copper are some of Australia’s top exports. Its major trading partners are China, Japan, Germany, India, USA, Thailand, and South Korea (OEC, 2023).


Australia is a popular tourist destination, with visitors from all over the world flocking to the country to experience its unique culture, stunning scenery, and vibrant cities. It is home to some of the world’s most iconic attractions, such as the Sydney Opera House, the Great Barrier Reef, and the Uluru-Kata Tjuta National Park. There are also many smaller attractions, such as beaches, national parks, and wildlife reserves.


 Social environment in Australia

Australia is one of the best countries to live in the world in terms of wealth, education, health, and quality of life. Compared to other major economies, it has a relatively small population of around 26.2 million (Worldometer, 2023).


The life expectancy in Australia for men is 80 years while 84 years for women. However, having more retirees and fewer people of working age is an area of concern for the country.


Australia is one of the most multicultural and multiracial countries in the world. It has an important heritage from its indigenous people who are believed to have migrated from Asia many thousands of years before the arrival of British settlers in 1788. It adopted a policy of mass immigration after the Second World War; however, migration is a politically sensitive issue in Australia.


Australia has a good number of public and private universities which attract a lot of international students every year. In fact, international students now make up more than a quarter of enrolments at some universities in the country. Most of the international students come from countries such as China, India, Nepal, Malaysia, Vietnam, Brazil & Colombia.


Australians are generally lively, hardworking, and outward looking. They spend a lot of their spare time in playing or watching sports. In fact, Australia is one of the world’s best in many sports e.g. cricket, hockey, and swimming. Its sport sector makes a significant contribution to the country’s GDP.


Australia has a universal healthcare system, which provides free or low-cost medical services to all citizens. The system is funded by the government, and it covers a wide range of treatments and services.


However, Australia needs to work more on issues such as indigenous rights, discrimination, refugee rights, harassment, incarceration of children, and homelessness. These issues are very important to many Australians according to different surveys.


Technological environment in Australia

Technological environment is another key element in this PESTEL analysis of Australia. Australia is one of the most technologically advanced countries in the world. It is well-known for adopting new technologies at a faster rate than many other developed countries. It has witnessed an enormous growth in technology over the years.


The government is investing heavily in the digital economy, with the aim of creating a more connected and efficient economy. It is also investing in new technologies, such as artificial intelligence, blockchain, and the Internet of Things.


Australia is also a leader in the renewable energy sector, with the country’s solar and wind industries having grown significantly in recent years. However, the government needs to invest heavily in renewable energy, with the aim of making the country’s energy supply more sustainable.


Local companies are investing in technologies to meet the growing demands of their customers. Computers & equipment, software, tech consultancy services, cloud, and artificial intelligence are likely to drive these investments which should result in more innovation and designs.


However, many analysts are of the view that Australia has a long way to go if it would like to challenge tech hubs in Asia, Europe, the Middle East, and the US. It also has shortage of digitally skilled workers.


Environmental factors in Australia

Australia is one of the most beautiful countries in the world with stunning beaches, mountains, and forests. It is also widely known for its brilliant biodiversity. In fact, more than one million species of plants and animals are found in the country. No wonder why millions of overseas visitors visit the country every year!


However, Australia faces some environmental challenges. For instance, Australia is the driest inhabited continent on earth. Likewise, climate change is also a great challenge. A recent Senate inquiry has concluded that climate change is a ‘current and existential national security risk’ to Australia.


Water insecurity, the spread of infectious diseases, and regional conflicts over food, water and land are some of the potential outcomes of climate change. Therefore, Australia needs to do more to tackle these challenges.


Legal environment in Australia

The last element to address in the PESTEL analysis of Australia is the legal landscape of the country. In order to ensure fair trading for both businesses and consumers, Australia has fair trading laws, competition laws, and consumer laws. The Fair Work Act 2009 is the primary piece of legislation that governs employment in the country.


Likewise, privacy laws deal with how businesses handle the personal information of their customers. Australia has an independent legal system, which is based on the common law system. The country’s legal system is overseen by the High Court of Australia, which is the highest court in the country.


Summary of PESTEL analysis of Australia

Australia is a vibrant and diverse country, with a rich history and culture. It has a strong economy, a thriving tourism industry, and a highly developed infrastructure. It is also doing very well in the technology sector, with a strong focus on innovation and research.


However, Australia needs to work more on issues such as lack of tech workers, indigenous and refugee rights, climate, change, harassment, and homelessness.


We hope you like the article on PESTEL analysis of Australia. You may also like reading SWOT analysis of Australia. Please share the article link on social media to support our free educational work. Other relevant articles for you are:


Pros and cons of living in Australia

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Last update:  10 February 2023


OEC (2023) Australia, available at: (Accessed 03 February 2023)

O’Neill, A (2023) The 30 largest countries in the world by total area (in square kilometers) available at (Accessed 10 February 2023)

PwC (2023) Australia, Corporate – Taxes on corporate income, available at: (accessed 01 February 2023)

Trading Economics (2023) Australia GDP, available at: (accessed 10 February 2023)

Worldometer (2023) Australia population, available at: (accessed 02 February 2023)


Author: M Rahman

M Rahman writes extensively online with an emphasis on business management and marketing. He is a graduate of both Leeds Metropolitan University and London South Bank University.

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