...To what extent, is the success of Australia's Fiscal policy, based on the changes of the current federal budget, viable for a stronger economy? This essay aims to illustrate, the success of Australia’s fiscal policy implemented by the current federal budget and its effects for the long-run. In relation, do these strategies provide sufficient evidence that ensures Australia’s “position of strength in the world economy” and if they are considerably better, in comparison to other international economic environments? I will focus primarily on the government’s expenditure on investment to boost the economy and the resulting effect it has towards the productivity, innovation and competition for Australia. The 2013-14 Budget, which illustrates a reduction in taxes of about $ 17 billion and an increase in expenditures of $ 24 billion, is strongly coherent, increasing aggregate demand by about 3 per cent. This process of fiscal expansion has been possible given the low Australian government debt that allows restoring an even budget by 2015 – 2016. There are several fiscal challenges directed to the 2013 Federal Budget. One particular Domestic challenge involves the importance on maintaining fiscal and monetary policy alignment. The previous federal budget 2012-13 fails to preserve alignment between fiscal and monetary policy. As a contractive fiscal policy lead to a decreasing aggregate demand by about 2%, the Reserve bank was cutting interest rates to stimulate demand. Thus, it is...
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... 3.1 Current Account Deficit page 3+4 3.2 Net Foreign Debt page 4+5 4. Australia’s Trade Policy page 5 3.4 Trade Liberalization and Protection in Australia page 6 3.5 The Australian Dollar page 6 3.6 SWOT (Strength, Weakness, Opportunities Cost and Threat) Analysis page7 3.7 CBA for Structural Reform page 8 4. Conclusion page 9 5. Recommendation page 9+10 6. Reference page 11 1. Executive Summary The purpose of this report was to analysis present of Australia’s trade position and prepared a plan for improving Australia’s position. Specific objectives were to identify key economic problems in term of trade and current account. Problems and solutions were found in the trade and current account though Carbon tax with high Australian dollar is likely to force radical structural reform on the economy and the manufacturing. The report recommends using structural reform to improve Australia’s trade position. Furthermore, Carbon tax initially acts against competitive international trade. In the long term, it can offer solutions to the two sector economy. 2. Introduction Since the onset of the East Asian economic and financial crisis in late 1997 the Australian economy has continued to record strong growth, despite many of Australia’s Asian major trading partners (MTPs) experiencing recession and a consequent slowdown in world economic growth. Therefore...
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...no differential products between them and obviously K-Mart and Target own large economies of scales. What’s more, in this industry, a very successful global brand gains popularity among customers in Australia, that is IKEA. For most consumers, IKEA will be their first choice as its unique and fashionable design and affordable price. IKEA targets its market to the middle class by providing not only the furniture but also the complete household goods with frugality. Today’s IKEA is not just running as a furniture store, consumers are able to buy any household goods like electronics and appliances even the candlesticks in IKEA. Anyway, the industry competition mainly derives from two sources, band advantage of those large supermarkets, like K-Mart and Target, also, price advantage of IKEA, which is global brand with constant dropping price (2%-3% annually) to provide the best values for customers. Secondly, the economy of Australia will serve as an important factor. The outbreak of the worldwide financial crisis in 2008 has caused the depression and its huge influence is not yet over. Many companies collapsed and unemployment rate rose increasingly. This financial crisis was owing to the credits corruption and intensification of liquidity problems. Some banks chose to offer other kinds of credits but made it worse then had to face bankruptcy. Also, the import and export industry of Australia was under attacked. Financial crisis led to a...
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...are dominants of Australia firms-food, resources, education, health care and services. These advantages are really essential for Australia business to compete with local industries and the others potential foreign providers. In particularly: * “The Asia century” requires the development of financial institutions and markets and makes the larger demand for insurance, banking, risk and wealth management services. This could be completely supported by Australia financial system which is highly appreciated in both professional products and services offered, in which insurance and finance are the fourth biggest sector in Australia economy. * During the past 10 years, Asia’s appetite for Australia natural resources, especially mining, has increased. This can be illustrated by the fact that Australia firms have enough experience and capability to exploit the available natural resources and set up related industries. * Focusing on human capital investment in Asia gave Australia advantages. In particular, with a high-ranked education system in the world, Australia universities, colleges and schools are attracting a humorous number of international students, especially Asia ones. In addition, the excellent health care products and procedures as well as great medical system are also demanded by many countries in this area, including the big customers-China. * In addition, several Australia firms are also already for integration strategy in which Australia-based abilities will...
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...EXC 9210 Introduction to International Economics Student Name: HE Yining Student Number: 25401696 Date of submission: 27/09/2013 Q1.Factors behind changes in demand of Auto industry in Australia There has been a steady decline in Australian's auto industry since the last decade. While there were five car companies residing in Australia previously, now there are only three left, which is Ford, Holden and Toyota, and Ford has announced their closure of manufacturing plant in 2016 (ABC, 2013). This steady decline in the industry is driven by the declining demand of Australian made cars. There are several reasons behind changes in demand for Australia cars in the recent years. One of the reasons commonly stated is the strong Australian dollar compared to other currencies. The higher dollar as opposed to other currencies made it that producing cars in Australia is relatively more expensive compared to other countries. The rising prices of Australian dollar can be seen at this table: Year | Quarter | Yen | US Dollar | Euro | Won | 2007 | March | 94 | 0.79 | 0.60 | 742 | | June | 101 | 0.83 | 0.62 | 773 | | September | 100 | 0.85 | 0.62 | 789 | | December | 101 | 0.90 | 0.61 | 825 | 2008 | March | 95 | 0.92 | 0.60 | 879 | | June | 100 | 0.95 | 0.61 | 975 | | September | 93 | 0.87 | 0.58 | 953 | | December | 63 | 0.67 | 0.51 | 893 | 2009 | March | 63 | 0.66 | 0.51 | 942 | | June | 75 | 0.78 | 0.56 | 988 | | September...
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...successful vehicle manufacturing company, Toyota Australia (Toyota), as it evaluates radical strategic options in light of contracting sales and no sign of improvement in future. Established in 1958 in Port Melbourne, Australia (Toyota Australia n.d.), Toyota became very successful locally and started to look for opportunities overseas. It made its first shipment abroad in 1986. By 2011, Toyota became the largest exporter of manufactured automobiles in Australia, exporting 73% of vehicles overseas. However, in 2013, as GM-Holden, a competing Australian vehicle manufacturer, announced complete shutdown of its operations by 2017, Toyota was facing existential threats both at home and abroad. In 2013, there were only three vehicle manufacturers in Australia. However, Toyota’s main competitors were not the Australian, but overseas car producers. Starting in 2005, Australia embarked on signing the Free Trade Agreements (FTA) with Thailand, the ASEAN counties, and New Zealand (Australian Trade Commission n.d.), as a result exposing local manufacturers to significant competition. Increased competition from the overseas car manufacturers eroded the revenues of all local producers. Toyota also had to reduce its production volume and operate at an unprofitably low capacity utilisation rate. In an effort to improve its competitiveness in 2012, Toyota launched a Toyota Australia Future Business Transformation, a cost-cutting programme (Toyota Australia 2012). According the case study, this programme...
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...Part A Perceiving through different factors and variables that could have an impact on an organization’s marketing capability, GNC would need to cursorily examine it’s marketing environment. (Evans, M 1988) highlights the rules and regulations, effects of governments, changes in technology and the implications of societal changes as the basis of marketing environment, which ultimately influence impinging on marketing. These forces fall within the macro environment of PESTL frame. As the name indicates, macro environmental factors are the forces prevailing in the external environment of the organisation. Macro environmental variables include political, economical, socio-cultural, technological, and legal forces, having bearing on the industry and business players (Popkin, B.M Duffey, K & Gordon Larsen, P 2005) Business firms and industries have no control over such factors and thus are bound to adapt and act in accordance with macro environmental forces in order to exist and sustain in the marketplace. Thus, these variables would be considered as a ramification to such a supplementary industry, which in this case is “GNC”. POLITICAL: Political factors are one of the major macro environmental force affecting multi vitamin industries and related business firms. It takes into account legislations, market regulations, government stability and trade agreements (Mashhadi, AM & Ijaz-Ur-Rehman, Q 2012). Australian government has formulated quite strict and confined set of regulations...
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...Paykel currently face outsourcing manufacturing to a developing country beneficial to Australia? Globalisation can be described as the intertwining processes of the world. It is not only an economic process, which involves rising communication and integration of all countries’ economies through the growth in international trade and investment, but also the rapid cultural, social, technological and industrial exchange between nations (IYP, 2002, p. 11). Globalisation presents significant opportunities, as well as many challenges, for business around the globe. Many companies are currently making the decision to move production offshore to lower expenditure and increase profits. However, there are numerous environmental challenges, as well as ethical dilemmas involved with outsourcing. Throughout this essay I will show how globalisation is connected with the present issue of New Zealand’s ‘Fisher & Paykel’ (F&P) Brisbane plant outsourcing manufacturing of their whitegoods to Thailand. Shown by exploring the reasons and challenges involved both in the business environment and ethical arena. Such ethical issues under scrutiny at present are the loss of Australian jobs and the replacement of low wage employment offshore. After the analysis of various sources of information, it will be clear that the move by Fisher & Paykel, to commence production offshore, is in fact beneficial to the Australian economy. Globalisation is not a new process, but rather the result of human modernisation...
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...Foster’s Lager in Australia Introduction Foster’s Lager is an Australian lager brand that is owned by a South African brewing company, SABMiller. The beer is brewed in countries such as the UK under license. Its annual sale of 5 million hectoliters worldwide puts it as the second most selling beer after Carling. Despite these relatively high sales, Foster’s Lager is only popular outside of Australia. In Australia, the brand continues to perform poorly as compared to other brands such as Carlton Draught and Victoria Bitter. According to statistics from the Organization for Economic Co-operation and Development, the UK consumes approximately 1.2 billion pints of Foster’s Lager every year while Australia consumes roughly over 100 million pints annually (Koetting, 2013). This lack of popularity in its home country calls for a repositioning of the brand so that it can compete with other brands for a share of the local market. This paper seeks to analyze how repositioning of Foster’s Lager in Australia can increase its popularity and further drive its sales in the country high enough to match those in other countries such as the UK and the USA. Situation Analysis One of the most critical underlying factors explaining Foster’s Lager’s poor performance in Australia can be traced back to buyer behavior and failure of Foster’s Group to address the problem (Barrand, 2005). The Australian market has, for a long time, been known to hold strong connections with brands that have...
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...PEST Analysis of Confectionary Industry The Commonwealth of Australia has stable liberal democratic system with policies that support industrial growth (Australianpolitics.com, 2009). There is steady growth in labor market as well since 2001 (Chandra Shah, Gerard Burke, 2006). There are no additional restrictions enforced due to ecological factors on the confectionary market except for regular industry norms to take into account ecological issues. So political factor of PEST analysis is conducive to confectionary industry in Australia. Although, Australian economy is fairly sound in the past decade currently the economy is hit by global recession. Australian GDP (Gross Domestic Product) declined by 0.5% in the last quarter of 2008 (Australianpolitics.com, 2009). Inflation in Australia is currently high but set to fall from 2009 onwards(Freshplaza.com, 2009). Chocolate making industry standing at $ 2 billion in 2008 has witnessed steady and gradual growth for the last 10 years. However, the rate of growth may decrease slightly in 2009 due to economic downturn (IBISWorld, 2009). The downturn and slowing down of markets is global and Australian economy does not have any inherent weaknesses that are contributing to the slower growth rate. So Economic factor of PEST analysis also favors the confectionary market, except for the downturn caused by recession, which is expected to reverse from 2009 onwards. The Age-Sex pyramid of Australian population shows that 35-45 age cohorts...
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...trend in GDP per capital from the years 1998 to 2009. Note that New Zealand’s GDP per capita is overall lower than Australia but this is not the point of interest. What is to be highlighted is that Australia’s trend of growth continues to increase, however New Zealand’s trend declines slightly in the year 2009 which reflects the policy implemented and the time lag it took for the global financial crisis to affect GDP per capita. Graph 3 [pic] To further reinforce Australia’s position is the Canadian trend which shows a reduction of GDP per capita during 2008, and as confidence in the economy picks up, the GDP per capita for 2009 is much more positive. As shown through the graphs, Australia is in a relatively stable position in terms of GDP per capita as compared to other developed nations, with no fluctuations and only a steady increase in growth reflecting the successful macroeconomic policies which promote consumption and consumer confidence in the economy. Although successful policies implemented by the Government and the RBA may have dampened the effects of the global financial crisis and allowed our GDP per capita to stay strong and continually increase, there are other factors which have contributed to Australia’s current strong position in GDP per capita. Australia has always been a country with high mineral yields, which has driven the economy significantly even today....
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...resources within Australia. The tax takes 30 per cent on all mining profits that exceed the Government Bond Rate in addition to the usual company income tax, when profits exceed $75 million. The reason this tax should be deemed so appealing to the people of Australia is because it will help to address the imbalances in the economy, while sharing the profits with the Australian people. The average worker would gain an extra $450 per year and tax breaks will be more available to small businesses. Also, within the first three years this mining “super tax” is expected to raise $10.6 billion, which would help to boost the economy and bring the GDP of Australia up by 0.7%. The mining companies pay royalties to the states in which the minerals are being mined. There became a strong demand for these natural mineral resources and the demand led to an increase in the dollar. Recently, the cost of minerals has skyrocketed, yet the royalty payments did not rise quickly enough; calling for the need for this mining tax to be implemented to ensure that the Australian people were receiving a greater share of the profits from the money being made from mining. Economy theory fit with the topic? Comparative Advantage: Countries should specialize where they have their greatest absolute advantage (if they have absolute advantage in both goods) or in their least absolute disadvantage (if they have absolute advantage in neither good). We have two countries; Syria and Australia. Syria can produce...
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...A) The per capita GDP of Australia is $40,000. In comparison to other countries, Australia ranks nineteenth. The unemployment rate is currently at 5.6% which is ranked fiftieth in the world, when compared to other countries. Finally, the inflation rate is at 1.8%, which is down for the 4.4% it was in 2008. Australia’s inflation rate is ranked at sixty-fourth in the world. B) The top exports of Australia are coal, iron ore, and sheep. In 2009, Australia exported $245.9 billion worth of exports and it is predicted that in 2010-2011 Australia will export about $169.8 billion worth of goods in the energy category alone. It is the world’s largest exporter of coal. C) Similar to the United States, the currency of Australia is in dollars, but these dollars are different from U.S. currency dollars. On September 1, 1003, the exchange rate of Australian dollars to U.S. dollars is .65. This means that the equivalent of one Australian dollar is equal to .65 U.S. dollars or sixty-five cents. Just a few short years later on September 1, 2005 the exchange rate from Australian dollars to U.S. dollars was at .75. The Australian dollar slightly increased in value since 2003. After another couple years, on September 1, 1007 the exchange rate of Australian dollars to U.S. dollars was up to .82. Finally on September 1, 2009 the exchange rate was at .84. Given these number, it shows that in comparison to U.S. dollars the Australian dollar has increased in value in every year since...
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... This has reduced the cost of imports in the domestic market and cause high operating cost in Australia, some car-producing countries significant devaluing their currency, effectively making car imports into Australia even cheaper. The effect of the closure of the Australian automotive manufacturing can damage the long-term productivity capacity of Australia economy. The Australia economy would be smaller if automotive manufacturing left the country. The country will import more than export and lack of international competitiveness and heavy reliance on capital goods from overseas(Ruhul&Harry,2009)might increase Australia's current account deficit in the future.At the same time Australia will be heavily impacted with a long-term fall in gross domestic product (GDP) that cause by low investment and low expenditure. The evidence show manufacturing shared 8.4 per cent in Australia GDP in 2013 ( Joaquin, 2013).On the other hand the Australian automotive manufacturing receive small amount money of government support compared with others countries. It is also small compared to the economic activities generated by local automotive manufacturing. Furthermore, the Australian produce car more for domestic purchase than export. It show that there may be some gain from the lost, as the car retailer can supply cheaper car as the production cost overseas are inexpensive compared to Australia and all the money that taxpayers have been pumping into the car industry will be reallocated to...
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