A truly global financial services industry
Finance and insurance is the third largest sector in Australia’s economy, generating 8.6 per cent or $81 billion of real gross value added in 2007. This contribution is up from 7.1 per cent two decades ago. Australia’s economy is now a service-based economy, with service industries accounting for around 70 per cent of total gross value added. The finance and insurance industry is larger than the booming mining sector (the industry traditionally associated with Australia’s economic wellbeing) and its expansion has also aided growth in related sectors such as communications, property and business services.
Highly developed financial markets make Australia one of the major centres of capital markets activity in Asia.
Australia’s large and mature financial services sector has assets of more than $4.2 trillion, which is equivalent to almost four times GDP. The sector has benefited from 16 years of uninterrupted, strong economic growth, with favourable macroeconomic conditions reflecting the benefits of wide ranging structural reforms and sound economic policies.
Australia’s stock market is the largest and most liquid (measured by floating stocks) in the Asia-Pacific region behind Japan. In 2006-07, market capitalisation of floating stocks in Australia was almost triple that of Hong Kong and five times larger than Singapore. The depth, liquidity and sophistication of Australia’s financial markets underpins the country’s attractiveness as a global financial services centre.
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