Compare Australia with any other advanced economy and discuss their economic growth during last 5 years and its effects on the society. (both positive and negative)
Development of countries depends on the economic growth induced by the businesses. The economy of the country can be considered appreciable if the companies are moving ahead. Moreover, it can help in maintaining infrastructure that can compete with other nations. Businesses are the entities that involve in trading goods with customers or clients and provide services as and when needed (Terry, Jones and Braddock, 1985). More refined way to define the business is, ‘they are the most common form of trading in the economies that are oriented toward capitalism, where most of the businesses are owned by private groups or individuals. They involve in providing goods and services with the clients or customers in return of money’. Understanding the definition of the economics can also be beneficial at this stage, the economics helps in understanding how, what and why of producing goods, distributing those goods to the people or other businesses, and consuming the goods. The economic can be defined as the subject that deals in studying the practices related to transferring of the wealth from one hands to consumption and producing goods and services that are required by the people.
The paper will discuss the most vital division of the country’s sector that has significantly contributed to the development of the country. There were numerous options to choose from, but the selection of Agricultural Industry was considered important. The reason behind considering it as important is its contribution to the Australian economy and the significant impact it will have in the near future. The paper has also brought attention on the Gross Domestic Product. Moreover, the unemployment problems that have gone prevalent in Australia have also been discussed. Few of the subsequent chapters also discuss on monetary policies of the Australian government with reference to the Agricultural growth and the pros and cons such policy has on the country’s economy. Moreover, the inflationary condition of the Australian economy has been compared with the other economy round the world. Increasing carbon footprint and development in the economy has been brought to light in few of the chapters.
The contribution of the Micro-Economics as a field of study has been significant in the achievement of efficient economy around the world. Microeconomic refers to creation of something while utilising something in return. Most of the researchers and policy makers believe that if the minor issues are resolved in the specific sectors, then it is possible that the economy may move towards efficiency (Terry, Jones and Braddock, 1985). This can also be done through restructuring the policies on taxes and other such policies. Australian economy saw the prevalence of Micro-Economics till the end of 20th century, after its emergence in first part of 1980. The initial period of 1983 saw the major development in the Microeconomic studies (Stiglitz, Walsh and Gow, 2014). Moreover, such improvements can be tracked back to the time when the Australian dollar started to float. The recent policy that has been included in the Australian economy is GST (Goods and Services Taxes), which is the part of Micro-Economics. It came into existence in July 2000 and stood in function till 2006. Mentioned below are the agendas that can be found in the reforms related to Micro-Economic:
Eliminating the existing Traffic Protection through gradually reducing its presence.
Complete removal of few of the redundant industries.
Reforming the tax laws.
Australia is considered as one of the elite nations with development index ranking it in top 15 developed countries. The per capita income of the country ranks it in the top five countries.
National Competition Policy
It was brought in the country in 1990, and was aimed at reforming microeconomic elements. It states that the introduction in the country would help remove the multiple tax structure and bring various relaxations in the same (Tran, 2003). The competition policy that was introduced in Australia was targeted to bring all the commercial policies of Australia within the purview of common trade act. The government of Australia wants to introduce fair trade practices and more competition in the market. As it has been found that better and fairer competition help the customers in getting right product at right price. Moreover, any kind of issues are handled by the government’s ACCC (Australian Competition and Consumer Commission). The policy has helped various industries to grow that have eventually supported the agricultural sector of the country (Commission, 2005). Mentioned below are few of the related examples that will help in gaining further clarity.
Benefits of National Competition Policy
The assets of government can be handed over to the other party in both ways, either honestly or charging illegal commission or for any malicious intent. For instance, if the privatisation is being done based on the promise of fulfilling the requirement of budget deficit, then it can be considered as unhealthy intent (McAllister, Dowrick and Hassan, 2003). Even changing the prices or placing restrictions just for the sake of benefitting any particular government, then it cannot be justified on the ground of honesty and integrity.
The management of the port helps the farmer and the customers in sending and receiving the goods on time respectively. However, if the sale of port is mandatory, then it leads to the development of three key conditions. They are:
Methods that can be utilised to improve the competitiveness between the ports should be in place.
The need of any third party governance should be assessed prior to such action.
If the regulation of prices on ports requires any specific regulation?
Following the above mentioned points might impact the sale proceeds received by the government on the regular basis. However, such steps will ensure that the society is getting benefitted from the same. Here, it can be stated that the agricultural sectors can improve its revenue if the ports are managed properly and better competition is in place.
Mentioned below are the reason that results into the failure of the current processes of charges on the roads and arranged structures:
Firstly, the prices marked on roads by the government do not reflect any improvement in the economic costs that relates to utilising the roadways.
Secondly, it can be found that the system that has provided the roads receive meagre payments while the collection on the roads seems to be substantive.
Thirdly, the decisions related to investments on roads and infrastructures are generally taken by political entities who reflect no vested interest in the public welfare. The assessment or planning of the investments should have been conducted by some independent assessor with no personally associated interest.
It is believed that the introduction of the competition policy will bring some changes in the process the roads are being tolled, and it will also help to address the issues mentioned earlier (Feyer and Williamson, 1995). The improved revenue of the council will help in the better cost management, thus allowing development of the abilities that can allow easy movement of the heavy vehicles or careers of agricultural products. This can help the farmers and the local communities in getting better return for their hard work. Moreover, reduction in the excises on fuel will help the farmers in getting appreciable benefit and thus will reduce the unnecessary pressure from them. This reduction will not cost much to the government, but it can change lives of thousands.
Australia has seen many improvements in its water market. Now the water are more readily available than before and the farmer can get better access to the water resources at cheap rates (Stokes and Howden, 2010). Such availability of the water has helped the farmer in utilising the water in protecting the soil from getting drought hit.
However, in spite of recent developments, there are areas that are untouched by the facilities of cheap water. Therefore, it is required that special effort is being placed in those areas to bring the leftover improvements (Stokes and Howden, 2010). The areas that are more rural or lies somewhere between the rural and the urban are still untouched from these facilities which is impacting the overall agricultural sector of the country.
All these three factors is impacting the farm sector in substantial magnitude and thus requires special attention from the concerned authority. The competition law that has been brought in place largely depends on the behavioural pattern of the business world and how any specific sector behaves in particular situation. This will allow the companies to focus on maximising the profit that will eventually call for better products and services. These whole improvements will lead to the improved situation of the agricultural community.
Areas to be Forced Attention
Mentioned below are the areas that need to observe while assessing the changes or improvements in the Competition Policy:
Misusing the power of market
Activity that cannot be justified on positive ground
Issues in the collective bargaining
Using the industry codes
Forming and advocating over market
Claiming credence where no standards are required
Allowing access to the infrastructure to third parties
The labour law of Australia can reflect entirely different picture from that of the United States. The impact of the different labour laws can be seen on the employment trends, kinds of jobs that are available. The table below compares the labour situation of Australia to that of United States. This will help in understanding the actual position of the country in comparison to other countries, in this case, United States.
The presence of skilled labour in a country clearly states the way the agricultural production is being handled (Hicks, Basu and Sherley, 2014). Few studies have marked that the farmers who are educated can implement new technologies readily in comparison to other farmers and can also bring innovative ideas in play to further improve the overall production. It is obvious that the agricultural activities are getting complex and challenging and thus it is required that the farmers learn new skills that can help them in mitigating the risks well on time. Moreover, if the farmers adopt advanced technology, then it will convert into improved crops. However, if the farmers need to utilise the benefits of the changing technology is farming, then they must adopt the capability to learn new things and actively participate in discussions that facilitates learning such things. At the moment, the Australian labour market is aging, and it requires vibrant and robust labour pool throughout the country. The need for more labour might push the Australian economy to efficiently utilise the labour they have at the moment, however, this will impact the overall productivity in the long term. This development might impact the competitive ability of the Australian economy.
The Australian government is currently utilising the option of hiring overseas labour through various programs and visa schemes. However, employers still face significant lack of labour and that is eventually impacting the overall productivity of the farm. Moreover, it has been found that the lack of understanding about the Agricultural industry and almost negligible emphasis on learning skills in Agricultural activities are impacting negatively. Here, it can be suggested that the Australian government should bring more improvements in the way the Agricultural sector is being handled. Mentioned below are the key drivers of the supply chain in the Australian Agricultural market:
Competition among labours
Accessibility to the labours from outside the country
Reforms in the labour laws that are likely to bring flexibility in the way businesses function.
Mentioned below are steps considered by the Government in the light of prevalent labour issues:
Simplicity should be brought into the processes that facilitate international labour to come and work in the country.
The flexibility in providing visas will attract more people to the country. Moreover, if the government allows them to work multiple times then it will be an asset for the country.
The Government found the right opportunity and brought more jobs to the people of the country and to those who were visiting the country for work in the Agriculture sector. Such surge in labour through initiatives led to the formation of National Farmers’ Federation that represents the whole farmers group in taking decisions on annual wages and deregulations related to workforce. NFF also focuses on helping the employers get right labour and fulfil any shortage as and when required.
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Minimum Wages are given to the family that is earning less than $15,000 annually. Those families whose annual income is above the specified amount cannot avail this facility. As per a recent survey, a startling fact surfaced that showcased that almost 83% of the population believes that they are in the middle income group, while as per the economic strata, only 40% of the population comes in that range. The graph mentioned below depicts the minimum wages from the year 1987 to 2012:
If a study from 2015 is taken into consideration, then it will found that the minimum wages has increased by 2.9%. This minor change came along with the various other changes in the policies and taxable rates. The minimum wages that has been introduced in 2015 were decided by the Fair Work Australia, but however, it was communicated to the common people through Assistant Treasurer Bill Shorten. The report consisted of a table that showed that the decision on increase was of $17.10 every week that helped the Australian minimum wage to jump to $606.40 every week. Australia was ranked as the fourth top most country with the appreciable wage rate. The minimum wage rate of Australia stood at 20-30 percent higher than other countries such as USA and New Zealand. The higher wage rate increases the cost incurred in producing any agricultural goods which translates into export charges that are normally higher than other countries. Moreover, this leads the country to struggle in other countries to gain the export share.
Therefore, it should not be the subject of surprise if the food processing sees drastic down fall. On one hand where the food processing is declining in the country, on the other hand, it sees improvements in other countries, mostly those that are developing such as India, or China. The changes in the minimum have the various implications. On one hand, the raised minimum wages brought sense of satisfaction among the working class, on the other, it has brought heavy burden to the employers. Now the employers are facing difficulty in paying the minimum wage. This pressure has built up amidst other unfavourable policy changes.
Technology that has been utilised in the country’s agriculture has brought unprecedented improvements in the sector and most of the time tried to fulfil the gap of labour. Mentioned below are few of the technologies that has brought significant change in the way Agriculture sector functioned:
Stump Jump Plough: It helped the farmer to till soil after the removal of roots from the soil.
Header Harvester: It helps those farmers who produce on large scale. Manual harvesting is very difficult due to the time and effort it requires. Therefore, this harvester helps in bulk removal of the crops.
The inclusion of various other technologies such as wheeled and tracked tractors and travelling irrigators helped the farmer in fast tracking the processes thus saving time and money.
Few of the studies have suggested that agricultural growth in the country has almost stopped after early 1990. If the study includes the drought period from 2001-10 then still nothing can be said as significant improvement. The graph given below compares the productivity growth of various countries.
There can be various factors that can be the contributors in reducing the growth, however, few of the significant are: (i) lack of public investments in the agricultural R&D, (ii) private sectors are generally discouraged from entering the research and development, (iii) the reliance of the country on the cereals and livestock production, and (iv) lack of fertile soil.
However, in spite of presence of such challenging factors, the west part of Australia can see better growth in the productivity in the agriculture. The focus was more on output growth rather than input growth. The growth study found out that the output was almost double over the past 4 decades.
The study states that the agriculture has always helped the country as a backbone sector and has the capability to support the Gross Domestic Product of the Australian economy. However, the labour problem seems to be rampant, but few more policy changes can bring further improvements. The current development in the agriculture can be credited to the technological advancements. Moreover, the minimum wage policy, on one hand where it seems to impress the workers, on the other, it is posing financial problems to the employers.
Buchanan, J, and R Callus. "Efficiency And Equity At Work: The Need For Labour Market Regulation In Australia". (1993): n. pag. Print.
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Feyer, Anne-Marie, and Ann M. Williamson. "Work And Rest In The Long-Distance Road Transport Industry In Australia". Work & Stress 9.2-3 (1995): 198-205. Web.
Hicks, J, PK Basu, and C Sherley. "The Impact Of Employment Specialisation On Regional Labour Market Outcomes In Australia". (2014): n. pag. Print.
McAllister, Ian, Steve Dowrick, and Riaz Hassan. The Cambridge Handbook Of Social Sciences In Australia. 2003. Print.
Stiglitz, Joseph, Carl Walsh, and Jeff Gow. Introductory Microeconomics. 2014. Print.
Stokes, C, and M Howden. "Adapting Agriculture To Climate Change: Preparing Australian Agriculture, Forestry And Fisheries For The Future". (2010): n. pag. Print.
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