The Current State Of The Australian Economy And Its Management Essay

The benchmark investment rate in Australia was last recorded at 2.25%. Investment Rate in Australia found the middle value of 5.13 percent from 1990 until 2015, arriving at an unequaled high of 17.50 percent in January of 1990. Inflation Rate in Australia averaged 5.21 percent from 1951 until 2014. Customer costs in Australia rose 1.7% during the time to the December quarter 2014, the slowest yearly pace in more than two years as petrol costs dove. Australian yearly inflation rate abated to 2.3% in the second from last quarter of 2014 from 3.0 % in the past period, determined by a fall in cost of electricity, after the removal of tax duty on carbon discharge beginning early July. An alternate key variable that impacts the business is the unemployment rate. While the unemployment is staying high it is normal that RBA will keep the investment rates and trade rates low. Unemployment Rate in Australia diminished to 6.30% in February of 2015 from 6.40% in January of 2015. Unemployment Rate in Australia found to be in between 6.91% from 1978 until

Currently the Turnbull Government is creating negative growth in employment. The Government needs to implement an expansionary fiscal policy to stimulate the economy and create job growth. The expansionary fiscal policy is to improve the current economic situation, the government does this by reducing tax rates and increasing government spending. This process encourages people to put money back in the economy, while the economy is being stimulated job growth is occurring as companies have an increased money supply while there is an increase in economic

There has been a rapid growth in the service sector jobs and a strong decline in manufacturing employment (Murphy and Watson, 2009). Since the economic boom in the 1950s and 1960s, the Australian economy has been unable to stand the growth of living standards appreciated by households in that period.

Figure 4.0 depicts how Australian labour productivity has increased significantly over the last two decades, but real wages lag behind significantly. One contributing factor to this could be the profit produced from the increased productivity has not necessarily been redistributed as increased wages for employees. An increase in wages will increase in consumer spending on goods and services as well as better living standards. This increase has the follow-on effect of creating additional labour requirements for the unemployed. Figure 4.1 displays the trend of how the nominal and real wage growth has been slow and even dipped into negative rates.

The economy in Australia runs through the economic cycle involves in the cycle of boom and recession in a business. In an economic boom, businesses make profits by increasing the prices of their products by the consumers who are willing to spend their personal disposable income. Although, there are disadvantages during an economic cycle when it comes to recessions in the economy. Recessions can make businesses not earn profits out of its sales because consumers didn’t have the confidence to spend their money. Employees need money in order to save but the business isn’t making a profit so they have to cut down some employees because they don’t have enough money to pay all of their employees. Economic influence is an external influence because

Economic growth is caused by an increase in aggregate supply, and a rise in aggregate demand. This was evident during the peak of the mining and commodities boom during 2011-2012, during which Australia’s economic growth was relatively high at approximately 4.5% in comparison to that of other advanced economies post the downturn of the 2008 GFC.

Outline: This article discusses the economic growth within the australian economy and its effects. It is stated that the Australian economy’s economic growth is driven mostly by immigrants rather than natural increase. The business bible shows a growth of average of 1.42 per cent being the weakest in the past 15 years. Slower growth in the economy leads to slower growth in GDP, lower standard of living, harder to reduce budget deficit and reduced productivity of labour. The drive for smaller government spending doesn’t rapidly increase standard of living. The federal budget will be hard to surplus back into.

This paper focuses on Australia’s business cycle. It explains factors of Australia’s business cycle, the rise and fall and how these have changed over time. This paper shows and demonstrates the key features of Australian business cycles during 2010-2015. It, specifically, identifies the chronologies in the nation’s classical cycle (expansions and contractions in the level of output) and growth cycle (periods of above-trend and below-trend rates of economic growth). Which presented an assessment of where Australia’s economy, in the past, current and future.

The main issue in the article is the decline of Australian dollar against the US dollar. Upon perusing it is understood that the Australian dollar is steadily declining during the current year. The economists said that this is due to the fall of commodity prices globally. The Australia is agriculture and resource based economy, and the Australian dollar heavily depends on commodity price and terms of trade. According to IMF the reason for the falling commodity prices is the slowing of demand globally. It’s mentioned that Australia, Canada and New Zealand are the three of the worst performing currencies of 2015. In order to stimulate economy the Reserve Bank of Australia is planning to cut its rate to 1.5% before March 2016 to deal with lower GDP and low domestic demand that is increasing unemployment. Mining investment has slowed down which reduced the value of iron ore causing Capital imports to fall in Australia. If the dollar declines too far then Australia’s import will be reduced and this is difficult for businesses. Another nail in the coffin for Australian economy is the plan to raise the rates of UK and US which could further decline the value of AUD.

In the past decade, Australia’s productivity growth, the main driver of growth in income in 1990s, has not only slowed down but also fell below its long-run average as shown in Chart 1 below (OECD, 2012).

Whilst the Australian economy has enjoyed an unprecedented period of economic prosperity that provided ample opportunities to address poverty, inequality and improve opportunities for the poor. The real kicker is the economy would have gotten a welcome boost if these issues had been addressed. Instead, successive governments have failed to meet our infrastructure needs, failed to plan for the future and failed their social obligations.

The Gross Domestic Product in Australia enlarged by 0.2 percent in the second quarter of 2015 above the first quarter. GDP Growth Rate in Australia was around 0.87 percent from 1959 until 2015. It reached an all-time high of 4.4 percent in the first quarter of 1976 and a record low of negative 2 percent in the second quarter of 1974. In 2013, Australia’s GDP per capita was $67,458.36 in U.S. dollars, and the United States’ was only $53,041.98. The inflation rate in Australia was documented at 1.5 percent in the second quarter of 2015. Inflation Rate in Australia was around 5.18 percent from 1951 until 2015. It reached an all-time high of 23.9 percent in the fourth part of 1951 and a record low of -1.3 percent in the second quarter of 1962 (“Australia Inflation Rate,” 2015).

Australian economy as a whole remains cautiously optimistic, due to the Euro zone sovereign debt-related issues and lack-lustre American economic performance. Strong financial and mining sectors offset weaker retail and manufacturing performance. Unemployment rate remains fewer than

The characteristics of the US economy indicate a strong growth within the market over the next year in comparison to Australia. The US GDP Growth Rate is currently the lowest it has ever been at 0.7%, and it is expected to increase to 1.3% by 2018 (Federal

Although the exporting and importing of goods and services have totally grown by 646% and 585% percent through the last twenty-five years, the data for last year (2014) is not an optimistic outlook. The growth rate of exporting of goods and services was -2.02%, while the growth rate of importing of goods and services was -5.81%. Both data are negative. It means Australia’s exporting and importing conditions were all decreased in last year, which had never happened in the last fifteen years. (Figure 16)