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Running-Head: CURRENT AUSTRALIAN STATE ECONOMIC AND MANAGEMENT
Current Australian State Economic and Management
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CURRENT AUSTRALIAN STATE ECONOMIC AND MANAGEMENT
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Executive Summary
This study revolves around the Treasury bill analysis and the reviews on the current
economic management a case study of the Australian state. Australian government evaluates the
significant change in our economy. Campaigns and election are currently based on who is a
better economic manager. Parties try convince the people of our country how they will be able to
make a healthy economy, and they will be able to create more jobs for women and youths. My
concern is what they want to mean. Do they wish to say that they will raise the level of GDP in
our country? Are they concerned with raising the level of per capital income? This case study
will aim at curbing the constraint of the bigger gap of the vast change of the Australian annually
budget deficit. Also, it will aim at studying the unemployment and its causes and what will be
done to eliminate some forms of unemployment. To consider a good report of this study a keen
view of the long term and international perspective of the Australian economy is of great
concern. Evaluating the economy of the Australian with other countries that cut the government
expenditure as their economy growth grows rapidly is much important in studying the current
situation of the Australian economy.
http://www.heritage.org/index/images/country-comparison/2015/australia.jpg
Figure 1: Comparison of the economic management of Australia with other nations
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The above figure shows that Australia economy is rated top along with other nations
although it is not the best in the world. It displays the level of GDP has been superior compared
with those countries that the government expenditure as their economy grows rapidly. The study
also views the long-term and international economic management and expansion through the
broad analysis of the Keynesian theories and thesis. LNP coalition is an anti-Keynesian party in
Australia. Since 1996, the party has taken a view on balancing their budget to cater of the depth
of the deficit each year. This left all banks in Australia to control the bank rates to aim at
stabilizing the inflation allowing the state growth of the economy. The study also chips in
examining the current micro and macro-economic issues affecting the Australian economy.
Introduction
This study is categorized into two parts. The initial one is going to deal with the present
economic situation within the working environment of Australia, and also the international
conditions of the economy. The second part will study the issues of financial management that
will face the oncoming government (Keller 2014). Part one is divided into: current domestic and
international situation of the economy and its overview, comparison between the Australian
economic sectors and the non-economic sectors, analysis of the debt situation in Australia and
market analysis and trends. The second part will study a precise analysis of the domestic
economic situation in Australia based on different times and various economic development
made by the diverse coalition under the control of the state. A detailed literature reviews on
current and ongoing economic transition upon precisely. In the last part of this study will tackle
and evaluate the government expenditure and revenue. The study will also compare the future
perspective of the forecast and the fiscal policy resultant. Lastly, the study encompasses reviews
on the distribution of the income in recent years within the household sector.
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Economic Situation and its General Overview
This study will provide the general outlook of the international macroeconomic situation
since 1984 up to date. It is going to be analyzed and evaluated according to the future projections
of the economy based on the current approaches and project undertaken to allow growth of the
economy. The study of output, supply and demand forces in Australia in 1984 reflected strongly
(McBride 2012). Gross national product was rising nearly at five percent. The rate of the price of
the consumer slowed down causing an increase in inflation.
This almost leads to a rise in the level of the unemployment in Australia. The world trade
remained at a stagnated point. In 1986, the government started to provide incentives to farmers
created more available jobs to its citizen. This led to an increase in the output. There was an
increase in all sectors and the high productivity allowed the imports and exports are making a
drastic improvement in international trade. Inflation rate remained almost the same as there was
an offset by a slight change of increase of other nation for example USA and Japan.
Unemployment
Employment rate should continue to rise periodically. The increase in human labor
arising from the various sectors in Australia reflects that the level of employment is increasing.
The state continued to move from consumption to investment. After 1986, international trade
was expected to grow at a rate of 7.5 percent. The Australian government created more business
opportunities to allow the level unemployment to reduce. For the economy of the Australia to be
able to attain a favorable degree of employment in the current and oncoming years, evaluating,
implementing and control of various current economic policies should be apprehended. When
many people work and earn the income they can consume and save the rest and this create room
for investment, and this increases the economy.
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Monetary and Fiscal Policy
A consecutive monetary policy control mechanism is very vital when it comes to a stable
economy. This helps to curb the problem of inflation. The interest rate that the government sets
affects the investments in business, the borrowing rate in banks and the financial position of the
Australian state at large. As the currency becomes active, the Australian government continues to
get the deficit; a drastic shift of the exchange rate is experienced (Moran 2013). This change
affects the economy directly or indirectly. Australia has experienced an increment of the
economic growth for the last years. This is a result of the rapid growth in the agricultural sector,
manufacturing sector, and other major sectors. This led to increasing in output making people
consume more and invest. Real GNP experienced a high rate. The levels of unemployment
drastically fall.
Forecast and Projections of Monetary Policies
The domestic expansion of the economy that began during the early stage of economic
development is now easing. It has achieved through the significant enlargement of the markets
overseas for agricultural and manufacturing products. An excellent, substantial response obtained
in the competition in the international trade has steamed up the level of the degree of the
Australian economy as the factors of domestic expenditure making the rate of interest to be high
in future. The purchase habit will be little as there will be an increase in the price of
commodities. In various commodity market in the domestic economy has not been significant
from the normal cycle strengthening the import and export prices and the farm gate prices for
farmers. Assuming the world economy of other nation remains high, the ability of Australia to
stabilize its economy will depend largely on maintaining the level of competition with the
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developed countries, in turn will require a fundamental consideration on the various
macroeconomic policy imbalances.
International trade
As a consequence of the domestic growth and increase in the output and demand, the
world trade was boosted to a high extent. The recent data show that the economy of the Australia
is growing at a high rate compared with other nations in the contribution of it to the international
trade. The secret behind this driving force is the demand that is set in by the domestic analysis of
all sectors of the economy of the Australia, consumption of people and how they save and invest.
The combination of the forces of the pull and push of inflation and carefully controlling the
monetary policy by balancing the borrowing rate contributes much in the international trade.
Gross domestic product and balance of payment
Consumer price, unemployment rate, current government account balance and the trade
indices affect the level of GDP significantly (Hindley 2010). The output from manufacturing,
building, agricultural and service sectors has increased per year, and the estimated Australia
GDP has risen approximately by two percent. In building, agricultural, industrial sector, surplus
capacity is at the lowest level. This contributed to increasing in the domestic economy,
manufacturing export to underdeveloped countries, consumer consumption, monetary conditions,
and increment in the sale of agricultural commodities. GDP increases when these sectors are
taken to make them maintain the balance of payment, and this will allow its currency to remain
stable. More so, our state will continue to be competitive with other tigers of Asia.
Conclusion
Increasingly severe and long lasting time of unemployment period makes the economy of
a country grow at a very slow path. This arises because a long period of unemployment leads to
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loss of skills and knowledge lagging the economy behind. In an open domestic economy trained
skilled employees and capital shareholders may emigrate affecting the Australian economy as a
whole. The growth of some sectors than others is a major problem that affects our economy. The
state should try and make the growth be balanced. Keynesian theories and analysis explaining
the fiscal policy has an idea of “crowding out” this point out the importance of the government
adding debt to its citizens. This will allow for investment and increase of the economy is
realized.
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References
Hindley. (2010). Price regulation of airport services: Inquiry report. Melbourne:
Productivity Commission.
Keller. (2014). Statistics for Management and Economic: United States. South Western College.
McBride. (2012). Globalization: Issues for Australia:
Papers and Proceedings of an Economic Planning Advisory Commission seminar held in
Canberra on September 15, 2012. Canberra: Australia Govt. Pub. Service.
Moran. (2013). Globalization: Issues for Australia:
Papers and proceedings from an Economic Planning Advisory Commission seminar held
in Canberra on September 15, 2013. Canberra: Australia Govt. Pub. Service.