This research is a continuation of the Institute of Public Affairs’ (IPA) State Economic Scorecard 2024, which ranked the economic performance of the Australian states using ten key macroeconomic indicators. This paper expands on the state economic scorecard by assessing the underlying causes of economic underperformance: policies and business environment conditions that have a dampening effect on economic activity.
When businesses are operating in business-friendly environments, they can operate with ease and with minimal obstruction. These conditions promote economic activity and are therefore conducive to well performing economies. On the other hand, in less business-friendly environments, operating a business becomes more difficult. Such conditions restrict economic activity and output, and are less likely to produce well performing economies.
This is demonstrated in the IPA’s research. In the State Economic Scorecard 2024, the best performing states were Western Australia and South Australia. The research in this report establishes that the same two states score best for ease of doing business by overseeing the most business-friendly policy environments.
Victoria—the worst performing state in the State Economic Scorecard 2024—scores the worst for ease of doing business.
This paper uses twelve key metrics to develop an overall ease of doing business score. The twelve metrics are state government policies or state-level indicators that influence or determine a business’ ability to operate, and are therefore reliable proxies for business-friendliness.
As this paper demonstrates, state and territory governments have the policy instruments at their disposal which can create either a friendly or unfriendly environment for businesses.
When read in conjunction with the State Economic Scorecard 2024, this paper highlights the important relationship between microeconomic conditions and macroeconomic performance, and how business conditions flow on to affect overall economic performance.
