This paper highlights the important relationship between microeconomic conditions and macroeconomic performance, and how business conditions flow on to affect overall economic performance. Twelve key metrics are established 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 across the categories of tax, labour and construction costs, rental and energy costs and red tape. 

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 assesses the underlying causes of economic underperformance and argues that state and territory governments have the policy instruments at their disposal which can create either a friendly or unfriendly environment for businesses.

Key findings 

• Western Australia is the nation’s most business-friendly jurisdiction, followed by South Australia.
• Victoria is the least business-friendly jurisdiction, ahead of Queensland.

Ease of doing business metrics

• Payroll tax
• Land tax
• Land transfer (stamp) duty
• Labour costs
• Construction costs
• Job vacancies
• Rental costs
• Energy costs
• Fuel costs
• Development delays
• Regulatory requirements
• Regulatory restrictions