A BOOMING economy has made Australians wealthier than all their overseas counterparts and Australia's national income per person is now fifth-highest in the world, up from 23rd place 10 years ago, a senior UBS economist said yesterday.
Mark Rider, UBS's local head of investment strategy, said in Sydney yesterday many of Australia's economic fundamentals warranted "gold medals", with surging prices for resource exports and very high house prices.
Median wealth, which strips out the impact of the very wealthy on the national average, was just over $US221,000 ($217,500) in Australia last year, far above levels in Switzerland, Luxembourg and the US.
"But the drivers of Australian success are starting to deteriorate," he said. "Australia risks sliding back down these lists unless it can lift its productivity growth."
He pointed out that the impressive wealth figures incorporated house prices, which had grown by more than 140 per cent since 2000, faster than in any other country, and a currency appreciation over the same period bested only by Turkmenistan's.
Median Australian household incomes had also performed well, growing the second-fastest in the world. "Equivalent incomes in the United States and Germany actually went backwards over the same period," Mr Rider said.
But growing incomes for households were a double-edged sword, as Australia's labour costs per unit of output grew faster than those of any other country over the 10 years from 2000, and this had contributed to Australia's becoming the third-most expensive in the world behind Denmark and Norway.
The relative cost of doing business in Australia had increased substantially, too.
"We are over-regulated to death," said Mr Rider, a former Reserve Bank official and a graduate of the London School of Economics. He noted that Australia's ranking for "ease of doing business" had tumbled from fifth to 15th place.
James Tomkins, UBS's national sales manager and a gold medal-winning Olympic rower, said a crisis in productivity was likely to spur greater efforts to improve, as it did in sport.
"The shock of failure at the 1976 Olympics prompted the creation of the Australian Institute of Sport and the subsequent renaissance in Australian sporting achievements," Mr Tomkins said.
