Impact Of The Brexit Party On Australia 's 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.

High unemployment rate would surely affect people's incentive to spend, especially on discretionary goods which BRG sells. According to the ASX, discretionary goods are goods which are sensitive to the business cycle means they bear higher systematic risk. The unemployment rate in Australia surged to over 6% in the GFC and had not yet return to the pre-crisis level.

Gareth Hutchens states in the Sydney Morning Herald that economist are predicting he levy will have a negative impact on consumer sentiment, and retail spending. This will decreases expenditure within the Australian economy and potentially increase unemployment. A disincentive of Australian workers to work harder as that will increase their income and have a rise on taxable income. Productivity will also have a significant fall and economic activity will take a downfall. These possible impacts could prevent government from accomplishing their economic objectives for the future.

This has been the result of inflationary pressures due to excessive consumer demand, and a world increase in oil prices, the RBA’s primary objective is to contain inflation at 2-3% whilst also achieving sustainable growth. The current increases in interest rates will result in lower aggregate demand as consumers have less disposable income. This results in reductions in inflationary expectations, and a decrease in the demand for imports. Furthermore higher rates of interest will encourage overseas investment into Australia, thus resulting in an increase in the demand for the Australian dollar. An increase in the demand for the AU$, and a decrease in its supply due to less import expenditure will result in an appreciation of the AU$ in forex markets. Overall this results in depressed economic activity and lower levels of growth. However the RBA has been able to increase interest rates in order to contain inflation while maintaining economic growth. This is because the global economy has continued to grow at record pace, with strong growth in the US and China, and the recovery of Japan and Europe. Consequently demand for Australian exports has remained high, thus creating opportunities for increased production and subsequent economic

First we must look and account for the causes for the recent trends in balance of payments. This is very important as it reflects key features of the structure of the economy and highlights the imbalances in the relationship between Australia and the economy. In particular, we must inspect the current account deficit (CAD), which is when the debits are greater than the credits recorded as a percentage of GDP and is an accurate indicator of the economy’s current position.

In recent years, department stores industry has contracted since the hit of Global Financial Crisis creating shock on consumers’ confidence (Figure 2), despite Australia’s narrow escape from going into recession (Uren, 2009). As a result, the marginal propensity skyrocketed after GFC effect hit the economy from nearly mere 3% in mid-2007 to 12% in late-2008 (Figure 3). To stimulate the economy, RBA employs monetary policy by continuously lower cash rate since 2011 (RBA, 2012).

The current weak and volatile economic conditions, particularly in the United States and Canada, have impacted consumer spending. These week economic conditions will continue to impact consumer spending and purchasing habits for the foreseeable future. Consumers’

The magnitude of job losses and tighter credit standards will restrain consumer spending for a long time. The deleveraging of consumer balance sheets is likely to take years, as this unwinding is concurrent with increased levels of unemployment, both of which will be a drag on a recovery in consumer spending. Moreover, we see less credit available to fund extravagant purchases. Demographics—specifically, the retirement of baby boomers—will change spending and savings patterns. The events of 2007–08 have become the impetus for more responsible behavior, and we see a savings rate increase in tandem with a population taking greater responsibility for its future.

In the long run, this may lead to inflation, and overheating on the economy. The money gets devalued and the economy performs poorly. This is a possible trend when the real estate business is performing poorly, and the investors keep on claiming more and more relief from tax liability they owe the government. The balance of trade goes to the deficit and this has an effect of reducing the country’s competitiveness in the international trade. As such, it is notable that, the negative gearing on the property taxes, has contributed a lot to the changes in the economic conditions of the Australia.

Next, consumer spending may be influence by the “final sales” every store in the U.S. presents. At the end, one spent more than expected. Consumer spending may be a good thing for GDP but not for the individual. Many people need counseling on how to spend their money because on the long-term it may cause a decline on the economy.

The average Australian debt is growing, and the average household debt amount is almost quarter of a million dollars. While a large chunk of this is tied to home ownership, many Australians dread opening their credit card bills each January. Facing up to end-of-year overspending is depressing, but there is a way to avoid this happening again next Christmas, but you have to start thinking about it now.

In the 2014, the drop in real income and declines in consumption propensity was contributed to big fall of consumer spending in FY2014 leads, low cash flow from operation activities and limited investment benefits.

Globalization has led to greater inequality in Australia. It could be due to increased trade and growth, and capital liberalization doesn't work in favor of the poor. Governments are supposed to reduce the negative financial market positions and not impose any such policies that would enhance those situations. Instability can cause deterrents for both firms and governments in the same manner. Interest rates being on a rise can reduce investment and a volatile currency will discourage exporters, especially the smaller firms that do not have any financial expertise to guide them. Expansionary policies will also be affected as the cost of borrowing increases. And these pressures on the government demand that it lower taxes and increase incomes, at the same time cutting the government's own spending patterns,

Lardy points out that since the beginning of 1990’s, the consumption growth, as a source of economic growth, has diminished substantially compared with other sources, such as investment and exports. Specifically, household consumption dropped from slightly more than half of GDP in the 1980’s to an average of 46 percent in the 1990’s. After 2000, household consumption kept decreasing. By 2005, it only accounted for 38 percent of GDP, the lowest share of any major economy in the world. From the beginning of the decade until the global

BREXIT. A national decision influenced by the people and approved by the government with the sincere desire to promote independence and to make this country great again. The consequence is yet unknown however the uproar of whether we are to be victorious or not has divided the country. Efforts are to be made throughout this essay to elaborate on key facts which have an impact on the UK and in doing so the households of the taxpayers.