Australian Economy

In: Business and Management

Submitted By BCTIPPING
Words 765
Pages 4
While other countries fell into the global recession, Australia maintained strong economic growth, low government debt and a triple-A credit rating. With this record, you might expect the federal election to be focused on how to convert the strength of today's economy into resilience for the future. But instead the political spotlight has fallen on the perceived problem of government debt, with alarming proposals to bring austerity ''down under''.
For an American, Australia's anxiety about deficit and debt is a little amusing. Australia's budget deficit is less than half that of the US and its net debt is less than an eighth of the country's gross domestic product.
Most countries would envy Australia's economy. During the global recession, Kevin Rudd's government implemented one of the strongest Keynesian stimulus packages in the world. That package was delivered early, with cash grants that could be spent quickly followed by longer-term investments that buoyed confidence and activity over time. In many other countries, stimulus was too small and arrived too late, after jobs and confidence were already lost.
Advertisement
In Australia the stimulus helped avoid a recession and saved up to 200,000 jobs. And new research shows that stimulus may have also actually reduced government debt over time. Evidence from the crisis suggests that, when the economy is weak, the long-run tax revenue benefits of keeping businesses afloat and people in work can be greater than the short-run expenditure on stimulus measures. That means that a well-targeted fiscal stimulus might actually reduce public debt in the long run.
Australia may have successfully dodged the global crisis, but some politicians seem to have missed the lessons it taught the rest of the world. In this election, the conservative side of politics has foreshadowed substantial cuts to the government budget. This…...

Similar Documents

Australian Aounting

...Nicholas Gainsbrugh Overview of the Australian Accounting Standards Board and Harmonization with IFRS Nicholas Gainsbrugh Unit 6 Assignment for Prof. Gates Assignment: An Overview of the Australian Accounting Standards Board and Harmonization with IFRS Abstract: The accounting profession in Australia is thriving. The number of accountants employed at the professional level has risen strongly over the past decade, from around one hundred thousand in 1997to over one hundred fifty thousand in 2006 and it has really skyrocketed from there for the last 6 years. This paper will discuss what actions that Australia should take with regard to the adoption or (Harmonization) of IFRS. Many dissenters have complained - pointing attention to the political dimensions of the decision. While it might be politically unattractive for Australia to surrender some of its power to set its own standards, it would also be unattractive for Australia to remain on the outside while important international agreements are being made. This paper will also look developments in the adoption and implementation of IFRS around the globe, with particular interests in certain countries that are … within scope – similar to Australia - countries such as Canada, China and India. And if harmonization is not really a sensible reality, then would compatibility be a close second? Something to hope for if you fall short? Accountants are in short supply in the Australian labor market. How short is the......

Words: 2984 - Pages: 12

What Are the Main Changes Occuring in the Australian Labour Market? What Are the Main Causes of These Trands? What Effect Are These Changes Having on the Nature of Employment in the Australian Economy?

...INTRODUCTION This paper focuses on 3 current trends occurring in the Australian labour market, analysing their causes and effects. The chosen trends are structural unemployment, gender pay gap and skill shortage. The main causes of the first trend are increase demand for services and technological change, which have led us into a new era where highly skilled labour force is needed to operate more complex machineries and computer systems. The rapid technological change has caused structural unemployment, with workers willing to work but cannot because of their lack of required skills. The second trend, gender pay gap, illustrates how wide the pay gap between males and females is until today. The main causes of this current direction are the persisting stereotype of the male brad-winner, the feminisation of some particular industry and more importantly non-union collective agreement. The results of this general direction limit the potentials of the Australian national income and create a culture of discrimination. The third and last trend, skill shortage, is generated by cut in investment in skill development, difficulties in retaining the employees and variation of demand for labour. These phenomenons foster inefficiency and impossibility to produce at full employment of resources. TREND 1: STRUCTURAL UNEMPLOYMENT One of the major trends that can be noticed in the Australian labour market is the steady presence of structural unemployment. Most of the......

Words: 2540 - Pages: 11

Australian Politics

...1996 and ended in December the 3rd 2007. After 1980, it was the first Federal victory of coalition of the National Parties and liberals. The first terms was 1996 to 1998, the second term of the Howard was 1998-2001. The third term started in 2001 and ended in 2004. While the last term of Howard as Prime minister started 2004 and ended in 2007. All the four term are marked by severe conflicts in views among critics regarding the policies, agenda and forms of governmental style during Howards 11 year era. The first term of Howard is characterised by partial privatizations of Telstra, tight budgeting, industrial relation changes, Wik debate and persistent ministerial problems. The second term of his government is marked by deal with Australian Democrats which enabled the government to bring tax reform legislation and introduction of tax, Goods and Services Tax. The government faced some bleak electoral situation in the final year of second term, however due to the changes in policy in the year 2011; the government was able to recover some ground. The election of 2001 were flooded with the news of war against terrorism by the US and arrivals of the boatloads of asylum seekers. The success in election with an even higher majority was awarded to him again. The government still did not have enough seats in senate to pass the planned legislations. In the fourth term the Howard’s government saw operating with a rare majority in the Upper House of Parliament, which enabled the......

Words: 2949 - Pages: 12

Purchasing Australian Made Goods and Its Effect on Our Economy

...Purchasing Australian Made Goods and its Effect on Our Economy ABSTRACT The purpose of this essay is to analyse the effects of purchasing Australian made goods on the Australian economy in relation to determining the degree to which it is advantageous. The research concludes that in fact it is far more beneficial for consumers to purchase goods unbiasedly. The economic theory of a comparative advantage denotes that a country should aim to specialise its production as to channel resources efficiently and achieve economies of scale nationally. The increasing trend in globalisation has meant an increase in the availability of goods and services increasing our Gross Domestic Product (GDP) through benefiting from increased trade and maxamising on the benefits of fluctuations in the international business cycle. The gains from free trade agreements such as advances in technology and capital equipment have effectively made Australian production far more efficient. In combination, they provide a sufficient argument to conclude that purchasing goods unbiasedly is far healthier for the economy than strictly purchasing Australian made goods. Key Words: Globalisation, Comparative Advantage, Free Trade, Economies of Scale, Economic Growth, Production Introduction As more countries move toward a market capitalist model, a broader range of substitute goods become available, and this increase in choice between substitute goods proves a time consuming issue for the average......

Words: 1679 - Pages: 7

How External Forces Effect the Australian Economy

...How external forces effect the Australian economy Real Gross Domestic Product is a measure of GDP. RGDP is an inflation-adjusted measure that reflects the final market value of all goods and services produced at the end of any given year, regardless to any change in price or purchasing power. The inflation rate is a measure of inflation and is the percentage increase in the price of goods and services expressed on a yearly basis. The inflation rate can be measured by observing the consumer price index and the GDP Price Deflator. The unemployment rate is a measure of unemployment. The unemployment rate is a percentage of the total workforce who is currently unemployed. Low rates are seen as inflationary because of the upward pressure on incomes, and high rates lead to a decrease in consumer spending. | |2003 |2004 |2005 |2006 |2007 | |RGDP Growth |3.4% |3.2% |3.2% |2.5% |4.4% | |Inflation Rate |2.4% |2.6% |2.8% |3.3% |3.0% | |Unemployment Rate |6.3% |6.0% |5.1% |5.1% |4.9% | [pic] http://www.dfat.gov.au/GEO/fs/aust.pdf (RGDP Growth & Inflation Rate) http://www.indexmundi.com/australia/unemployment_rate.html (Unemployment Rate) The business cycle is the fluctuations in the economic growth over a long period of time. The business cycle can rather irregular and does not tend to follow any given particular pattern. There are four main stages that occur during the business cycle; an expansion, where growth is above average, a peak, the highest point of the......

Words: 638 - Pages: 3

Australian Economy

...commodity and asset price inflation (a constraint on economic growth), emerging protectionism and currency imbalances (resulting in lower exports and higher imports). Inflation The media article in essence describes factors that affect inflation. The RBA is predicted to not raise cash rates from 4.75% until May, which help determine the interest rate, a tool helping to dampen demand and thus lower demand-pull inflation. Cash rates were kept on hold as he underlying rate of inflation was around 2.25% which is between the RBA’s target of 2-3% and the recent natural disasters has harmed output (increased interest rates will soften growth so it is not needed when there is low inflation). Also, the “large exchange rate appreciation” of the Australian dollar at the end of 2010 will hold inflation as imported inflation is decreased due to foreign goods and services becoming cheaper. Consumers are being cautious with spending and as a result this will lowers demand-pull inflation only in the short-term, however in the long term this will not persist. Without the floods the RBA may raise the cash rate sooner than May, a dominant factor being the unemployment rate falling to 5% in January which close to the non-accelerating inflation rate of unemployment (NAIRU) where a movement pass this situation of full employment will trigger inflation due to higher wage demands a cause of more specifically cost-push inflation. Strong domestic economic growth of Australia during the global......

Words: 1563 - Pages: 7

Australian Beverages

...Understanding the external environment (Industry attractiveness) 1. Identify the industry, product segments and value chain. The industry is the Australian Non-alcoholic beverage industry. Currently, Australian Beverages Ltd is the second largest competitor behind Butlers Corporation. Industry consolidation has been occurring but is not expected to continue in the future due to the relatively high market shares held by major competitors. Core operations cover processing and bottling (not retailing). Product segments include CSD (in decline stage), Diet CSD, Fruit Drinks, Milk Drinks, Energy Drinks, Sports Drinks, and Ready to drink coffee/tea. Entry into the snack food market was recently undertaken. 2. What is the current life cycle position of the industry? The Australian Non-Alcoholic Beverage Industry is at the mature stage of its life cycle. Whereas, the bottled water manufacturing industry is currently in growth stage. Major segments of the bottled water industry are still water and sparkling water. 3. What have been the key issues affecting historical and future industry growth? What was their impact or their likely impact and the overall assessment of the industry’s future growth? Key Issues influencing growth, using PESTEL Model (Analysis of industry as a whole including bottled water industry. Trends in broad industry also impact the bottled water industry) FACTOR ISSUE Historical / Future NATURE OF IMPACT (+ / = / -) Politics  Import Tariffs – only affects...

Words: 976 - Pages: 4

The Australian Federal System’s Effect on Australian Businesses

...The Australian Federal System’s effect on Australian businesses It is widely thought that the role of the government is to guide their economy into a steady growth and provide support for their local industries and businesses. However there is a growing dispute with that statement with recent media coverage of large iconic Australian companies such as Qantas and Holden in dire economic situations. This paper will argue that the role of the Australian government is to stimulate the national economy and to help Australian businesses. However these aides must be beneficial to both the government and the business. If the assistance is non-sustainable, then the government is not obliged to try and alter the inevitable. In order to support this argument, this paper will provide an understanding of Australia’s social structure and analyse the companies listed above In order to understand the role of the Australian government on businesses is to understand how Australia was built. The doctrine of separation of power was inherited with the birth of the Federation of Australia in 1901. The doctrine split the institutions of government into three branches; legislative, executive and judicial. This is a way to prevent a corruption, internal abuse of power and conflict of interest of people in high positions of the government. Although there are numerous interpretations of ‘Capitalism in Australia’, Lloyd (2008, p.30) states that “From 1992 Australia has experienced a period of......

Words: 1080 - Pages: 5

Australian Economy

...of an American consultant whose team had just pitched a project to a potential Japanese client. In its dealings with Americans, the team was accustomed to being bombarded with questions after such a proposal, but this time it was greeted with a long silence. Other members of the team, taking the silence as disapproval, were ready to pack and leave. The lead consultant gestured them to stop. Although he was not particularly familiar with Japanese culture, he read the client’s face and posture and sensed not rejection but interest—even deep consideration. He was right: When the client finally spoke, it was to give the consulting firm the job. Finally, empathy plays a key role in the retention of talent, particularly in today’s information economy. Leaders have always needed empathy to develop and keep good people, but today the stakes are higher. When good people leave, they take the company’s knowledge with them. That’s where coaching and mentoring come in. It has repeatedly been shown that coaching and mentoring pay off not just in better performance but also in increased job satisfaction and decreased turnover. But what makes coaching and mentoring work best is the nature of the relationship. Outstanding coaches and mentors get inside the heads of the people they are helping. They sense how to give effective feedback. They know when to push for better performance and when to hold back. In the way they motivate their protégés, they demonstrate empathy in action. In what is......

Words: 400858 - Pages: 1604

Australian Economy Analysis

...Analysis of the Economy Export, Import and Production In recent years, Australia has been a net exporter of goods and net importers of services (See appendix 1). The country, rich in natural resources, is a major exporter of commodities. Iron-ore and gold account for 28% of total commodities exports (81 Billion US$ in 2013). Coal represent 18% or 38 Billion US$ and oil and gas for 9 percent. Manufactured goods constitute 33 percent of the total exports with food and metal products and machinery and equipment accounting. Agricultural products, particularly wheat and wool make up 5 percent of trade outflows Australia is a major importer of machinery and transport equipment, computers and office machines and telecommunication. Main import partners are China (15 percent of total imports), United States (13 percent of total imports), Japan (8 percent of total imports) and Singapore (7 percent of total imports). Trading Partners Trade with the Asia-Pacific region has become increasingly important for Australia. Of Australia's top sixteen major trading partners (representing around 80 per cent of merchandise exports); countries from the Asia-Pacific region are the destination for around 89 per cent of this trade. China is the most important trade partner of Australia, the country export Iron ore and gold as well as oil and many raw materials. China is also Australia’s largest source of imports. Major imports from China are mostly finished goods that include clothing,......

Words: 934 - Pages: 4

Overall Productivity of the Australian Economy

...Running Head: OVERALL PRODUCTIVITY OF THE ECONOMY Overall Productivity of the Australian Economy By Student’s Name Code+ course name Professor’s name University name City, State Date Introduction The best definition of productivity under the Australian and other contexts is, “the efficiency with which an economy employs resources to produce economic output” (D’arcy and Gustafsson, 2012, p. 23). It will remain that the most complete measure of productivity is the TFP (Total Factor Productivity), which accounts for all inputs involved in production. Normally, “the inputs are classified into capital (K), labour (L), energy (E), materials (M) and services (S)” (O'Mahony and Timmer, 2009, p. 538); the lead letters of each input are why this is called the KLEMS approach. Principally, the measures of inputs and outputs can be incorporated adjustments for quality change. Nonetheless, KLEMS approach is arduous in terms of data and that is the reason why very few countries in the world utilize this approach (Hannula, 2012). The MFP (multifactor productivity) approaches are easily implementable. The MFP approach accounts for merely two inputs, namely labour and capital. Presently, the most comprehensive measure of productivity available in Australia is MFP. Principally, labour input in the MFP ought to be adjusted for enhancements in the human capital (the quality of labour), yet as earlier hinted, this is not done in Australia at present,......

Words: 2350 - Pages: 10

Australian Education

...An agenda for Australian higher educ ation 2013–2016 a smarter australia Universities australia An agenda for Australian higher educ ation 2013–2016 a smarter australia This work is licensed under a Creative Commons Attribution-NonCommercial -NoDerivs 3.0 Unported License. Further inquiries should be made to the Chief Executive: GPO Box 1142 Canberra ACT 2601 Ph: +61 2 6285 8100 Fax: +61 2 6285 8101 Email: contact@universitiesaustralia.edu.au Web: www.universitiesaustralia.edu.au ABN: 53 008 502 930 ii universities australia Contents Preface 1 Summary 3 Vision 6 Policy context 1 Increase Australians’ university participation 8 13 2 Develop Australia’s globally engaged university sector 25 3 A powerful research and innovation system that drives economic and social progress 35 4 Efficiency, investment and regulation 49 Appendix: Development and consultation process 64 Notes 65 Tables Table 1: Gross expenditure on research and experimental development by sector, 2008–09 38 Table 2: Expenditure on research and development as a proportion of GDP, Australia and the OECD, 2008 38 Figures Figure 1: Increase in low SES domestic students in higher education, 1992 to 2011 15 Figure 2: Australia’s benefits from research 37 Figure 3: Commonwealth per student funding, 1989 to 2010 55 Figure 4: Public investment in tertiary education as a percentage of......

Words: 24217 - Pages: 97

Australian Beverages

...Extended case study Australian Beverages Ltd—Pre-seen case study information A Introduction to Australian Beverages Ltd In 1937, Australian Beverages Ltd (ABL) commenced manufacturing soft drinks [non-alcoholic drinks rather than ‘hard’ drinks that contain alcohol]. During the 1970s and 1980s, the company expanded its beverage portfolio by entering into other non-alcoholic beverage categories, such as fruit- and milkbased drinks. In 2011, the company was Australia’s largest supplier of non-alcoholic beverages. Tom Dwyer, the current Managing Director, has been with the company since 2008. He joined the company at a time when carbonated soft drinks (CSDs) growth was stagnating and shareholder confidence in the company was waning. Dwyer established a strategic planning team within the company to assess the current product portfolio and identify organic and acquisition growth opportunities. From this review the importance of operational excellence was identified and strong investment was made in world-class manufacturing facilities and systems. Process re-engineering was implemented to reduce the costs of manufacturing and time-to-market. Given the declining consumption of CSDs, Managing Director Tom Dwyer has sought to reduce ABL’s reliance on them, focusing on growing new products and entering new non-alcoholic beverage categories since his appointment in 2008. Alongside significant investment in product development of other non-alcoholic beverages, several......

Words: 7451 - Pages: 30

Australian Beverages

...Exam cases:  Patties Foods Ltd (PFL)  The death of the iPod  Australian Beverages Ltd Pre-seen exam information Semester 1 2012 Global Strategy and Leadership © CPA Australia Ltd 2012 Case Scenario 1 Patties Foods Ltd (PFL) Patties Foods Ltd (PFL) is a leading manufacturer in Australia’s branded frozen food industry. The company can trace its origins back 50 years to a small cake shop in the Victorian country town of Lakes Entrance. This cake shop was purchased in 1966 by the Rijs family who soon extended into pies and bread rolls. The business continued to grow through acquisition and product development and subsequently refocused its business around frozen savoury, dessert and fruit products. The company listed on the Australian Stock Exchange in 2006. Two members of the Rijs family remain involved in the company as board members. Today PFL is a major supplier and marketer of frozen savoury, dessert and fruit products. It has some iconic Australia brands in each of these product categories. PFL’s frozen savoury products include meat pies, sausage rolls, cheese and spinach rolls, pasties and quiches. Its well-known frozen savoury brands are Herbert Adams, Four’N Twenty, Snowy River and Wedgewood. PFL’s dessert products include fruit pies, waffles, crumbles and crepes. It also has fruit products that include frozen whole fruits (e.g. cherries, strawberries, cranberries and raspberries) and processed fruit products (e.g. fruit smoothies that are cubes of......

Words: 11829 - Pages: 48

Australian Beverage

...Intro • ABL, in 2011 largest supplier of non-alcholic beverages • Manufactures soft drinks, fruit drinks and milk based drinks • 2008 CSDs growth stagnating and shareholder confidence in the company was wanning • MD Tom Dwyer sought to reduce reliance on CSDs by investing in product development of the other NAB and diversified into the Australian snack food market, complementary food product to NAB B The Aust bottled water manufacturing industry • 2011 fastest growing NAB • Growth stage, increase in per capita consumption • Consumers have become health conscious and change their preference from CSDs to healthier beverages such as water 1. Demand and consumption trends • Total NAB revenue in Aust was over 10b in 2011 • Aust consumed 963 litres of bottled water in 2011 • However it is lower as compared to other similar markets have higher rate of consumption, hence potential for growth • Increasing awareness of the obesity problem in Aust and established focus toward health and wellbeing is ensuring strong future growth for healthy beverages • Introduction of sugar-free or diet CSDs not appealing to older Australians • Bottled water advantages: small sized plastic bottles easier to carry, resealable and has become a fashion accessory. 2. Industry segmentation 2 types still and sparkling water • Still water • 76% consumption, consumed for hydration and thirst satisfaction • Fat free, calorie free thirst quencher • Consumers not satisfied with tap......

Words: 640 - Pages: 3