Overall, Australia ranked as the sixth most competitive of the 61 major economies in the 2006 Yearbook. The 2006 numbers suggest Australia has most of its economic management right.

The numbers also show that Australia remains relatively uninvolved in global trade. Of 61 national and regional economies, Australia ranked 50th or worse on three key trade indicators.

Economic management: mostly on track

Australia's government bodies attracted some of the nation's highest individual scores in the Yearbook. The Australian businesses surveyed for the Yearbook gave high ratings to governments for their consistent policy direction. And Australia's political parties ranked fourth in the world in their understanding of economic challenges.

Australia was among 18 nations and regions where the Yearbook described government efficiency as making a "positive contribution" to the economy.

The Yearbook says Australia's ranking is being held back by personal tax rates. It ranks 35th for effective personal income tax rate on taxpayers earning the equivalent of Australia's per-capita GDP ($35,000). The 2006 Budget, delivered after results were compiled, is unlikely to have a substantial effect on that ranking.

Other issues

• Australians pay surprisingly high prices for finance. The nation ranks 52nd for interest rate spread - the difference between lending and deposit rates.
• The skills shortage is hitting business, with the nation ranked 39th for the ability to hire qualified engineers.
• Broadband use is strongly up, which helped Australia's ranking. But communications costs remain high, with Australia ranked 32nd for mobile telephone costs and 35th for dial-up Internet costs.
• Manufacturing labour costs are high and rising, with Australia ranked 44th for total compensation costs.

2006 rankings