Australia 's Financial Stability With Inflation Under Control

China has, for a sustained period of time, been one of Australia's most important trade and economic partners. But this has not always been the case. Since the late 1970s China has moved from a closed, internal focused economy to more of a global market oriented one that plays a major part in other nations economies, like Australia's. Although China is technically a Socialist nation, market capitalism is actively encouraged, much the same as in Australia. In 2010 China became the world's largest exporter, with exports ranging from natural resources to manufactured goods. (CIA-World fact book) Australia's economy, in this sense, differs from that of China's. As Australia is simply too expensive to manufacture goods ("Holden, Ford,

Although Australia remains geographically isolated from the world, international trade still remains a main factor that allows Australia’s economy to prosper. Australia’s long history of trade has created tight links and connections with other nations. Being a member of many worldwide organisations, Australia has produced many free trade agreements with countries around the world. However, recently Australia has seen a change in the composition and direction of its trade and has developed a strong trade link with the Asia-Pacific Region.

Australia’s economic status can be assessed using a range of economic indicators such as unemployment rates, Gross Domestic Product (GDP), inflation rates and interest rates. The economy can affect Australian business’s greatly causing them to flow through the business cycle. The business cycle purpose is to describe the overall trends of the economy and can show growths of high or negative. The four stages in a business cycle are: expansion, this is when the economy has high demands; peak, this is the turning point of the expansions before the economy falls down. A contraction is when the demand for goods and services are low; and trough, is the opposite of a peak. To evaluate Australia’s current economic status factors such as unemployment

The figure obviously had not return to pre-crisis level. Moreover, recent commodity prices had fallen significantly which will affect Australia’s short and long term economy.

This report will show an overview of the current state of the Australian economy and its management by the Federal government through examining economic indicators such as economic growth (GDP), unemployment, inflation and trade.

The Economic objectives of every Government are; full employment, low inflation, economic growth, price stability, internal and external stability, and equitable distribution of wealth, income and resources. The current Liberal Government, led by Malcom Turnbull, aims to create a stronger economy by; creating innovation within the science programme, implementing a stronger defence industry plan, generating new business opportunities through export trade deals, tax cuts and incentives for small businesses, a sustainable budget with a crackdown on tax avoidance, guaranteed funding for health, education and roads, and finally the restoration to the rule of law within the construction industry (refer to appendix 1). Currently the Australian economy is recovering from a near recession, meaning we are now on an upswing moving towards a boom. However within the first

With a GDP of over $1 trillion USD, the Australian economy is among the largest in the world (Cornett and Saunders, 2014). Australia is trading partners with the United States, China, and Japan, but their economic ties are mainly centered in the Pacific Rim. Exports are crucial to the country’s GDP and this has created problems regarding sustainability in the Australian economy.

The structure of Australian economy has continuously evolved over the last century and it continues to do so. In last century, there was a shift in the economy from manufacturing and mining sector to service sector. Firms in Australia have continuously innovated along with the boom in Information technology and have grown bigger in this digital era. Now, with increasing world demand for commodities especially from India and China, the stage has been set for Mining sector to rebound.

The second key national interest of Australia is the economy. Australia’s capital, jobs, standards of living, technological innovations and social advances rely substantially on exports and commodity values within Southeast Asia and the Pacific (Department of Foreign Affairs and Trade 2016a). The stability of South East Asia and the Oceania

GDP growth, unemployment figures, inflation rates and money aggregate figures are important interrelated indicators that can help to determine the health of the Australian economy. The patterns evident in these indicators represent practical expressions of economic health and can be seen as the result of action taken by the Reserve Bank to achieve the three key objectives:

As a result of the global recession, Australia’s GDP was forecasted to contract by 0.5% in 2009-10 in comparison to other advanced economies which were expected to contract by 3.75% in the same year. However minor the reductions in GDP, it was evident that Australia was not exempt from the global recession although is better placed and is expected to perform better than almost all other OECD economies. The global recession has also triggered a fall in household wealth and a disruption in consumer confidence with consumption forecasted to contract by 0.25% in 2009-10.

The growth of the Asian Economy has had positive structural effects on the Australian Economy. The trade volumes are at record high levels with China and the appreciation of the exchange rates have provided a boost to the economy. There has also been a rise in the resource investment, which has seen a reallocation of factors of production, which has lead to employment growth in these sectors. The focus of the Asian economies is on the production and consumption of goods and the commodity intensive nature of this rise has led to an increase in commodity prices. This has led to an increase in the productive capacity, which supports the exports, employment, incomes, taxes and wealth of the Australian population. The strength of the resource sector has had a positive effects on the exchange rate which when combined with the stable inflation rate has led to a significant increase in wage dollar of the working population (Plumb, Kent, & Bishop, Implications for the Australian Economy of Strong Growth in Asia, 2013).

Australia has been involved in trade that comprises of, investment, financial flows, technology transfers and the moving of labour since its foundation as a colony. These are all parts of a global economy. What changed are the size, direction and influence of these movements, especially since 1980. There are some factors that have helped this change. They include:

Australia has been involved in trade, investment, financial flows,technology transfers (from one place to another) and the moving (from one place to another) of labour since its foundation as a colony. These are all parts of a worldwide economy. What has changed is the size, direction and influence of these movements (from one place to another), especially since 1980. There are some factors that have helped this change. They include:

Unemployment has been one of the most persistent of all economic issues, leading to rising debates from economists over the causes of it and policies which should be used to address the matter. Australia’s unemployment rate has continued to be volatile with fluctuations every few years due to several mishaps however, has remained relatively stable for a decade. According to the unemployment rate reported by the Australian Bureau of Statistic, from 1978 to 2015 Australia is averaged to be 6.9 percent, with record high 10.9 percent in 1992 and an all-time low of 4 percent in 2008. During the early 1990s, Australia underwent the effects of the global recession causing a significant upsurge in unemployment rates, its highest level since the Great Depression of the 1930s. The falling aggregate demand, caused by this mishap, prompted cutbacks in production and the