Preview

Warren Bingham

Best Essays
Open Document
Open Document
2104 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Warren Bingham
MGSM845 – Economic Context of Management

Essay Term 4 2012

Warren Bingham – SID: 43105505

Table of Contents Table of Contents 2

Executive Summary……………………………..…………………………………………….……………3

2008-2009 Budget Outlook……………………………………………………………………………..4

Fiscal Stimulus Package…………………………………………………………………………………..5

Did the Fiscal Stimulus Package work?......................................................................................5

Natural Resouces Boom………………………………………………………………………………..…7

Employment…………………………………………………………………………………………………..7

Consequences of the Fiscal Deficit on economic activity……………………….8

What are the implications for Australia’s fiscal policy for the next 3 years?....9

Conclusion…………………………………………………………………………10

References………………………………………………………………………….11

Executive Summary

In 2008, the global financial crisis resulted in a global recession, the likes of which had not been seen in generations. It led to an unprecedented downturn in business and consumer confidence, which became a broader economic crisis.
Household consumption growth had already shown signs of decline, along with projections for expected taxation receipts (mainly due to lower forecasts of capital gains tax and company tax).
Whilst there were expected significant challenges due to the world economic outlook, the Australian economy was expected to continue to grow in 2008-09 and was forecasting a cash surplus of $5.4 billion for 2008-09 (0.4 per cent of GDP).
In light of the global developments, the Australian Government attempted to strengthen the economy by implementing a $10.4 billion Economic Security Strategy and a $42 billion Nation building and Jobs Plan as part of the 2008 Fiscal Policy. The $10.4 billion Economic Security Strategy was announced on the 14th October 2008, and both were implemented in the early months of 2009.
This paper will discuss the assertion that “The Australian Government has been running with too large a fiscal deficit



References: 3. Nigel Garrow and Tom Valentine, 2012, The Role of Mining in the Australian Economy, Contemporary Issues in Mining, Palgrave Macmillan 4

You May Also Find These Documents Helpful

  • Powerful Essays

    Australia has a long history of large and persistent current account deficits. During the 1960s the current account deficit averaged the equivalent of 2 per cent of gross domestic product. The CAD rose considerably, due to the floating of the Australian dollar and the opening of the capital account in 1980s, and by 1990s CAD has sustained around an average of about 4.5 per cent of GDP. However, in recent years the deficit has been falling and in 2011 it was just 2.25 per cent.…

    • 2210 Words
    • 9 Pages
    Powerful Essays
  • Powerful Essays

    Cambridge Labs Case Analysis

    • 5443 Words
    • 22 Pages

    Karunaratne, N. (2010). The sustainability of Australia 's current account deficits—A reappraisal after the global financial crisis. Journal of Policy Modeling, 32(1), 81-97. doi:10.1016/j.jpolmod.2009.10.002…

    • 5443 Words
    • 22 Pages
    Powerful Essays
  • Powerful Essays

    As Australia’s closest geographical neighbour, Indonesia and Australia have contrasting economies in regards to a number of different indicators. Economic growth, the increases in real GDP of an economy over a period of years, is an indicator which determines the size of an economy[1]. Along with economic development, these factors decide the classification of an economy either as an advanced economy, or a developing economy. Economic development is changes in an economy which result in a change in economic growth and human development[2]. The final indicator which is used to distinguish between the two economies is the economic role played by the government. This includes government expenditure as well as the impact that political decisions have on the economy. Despite receiving a milder downturn as a result of the GFC than Australia, Indonesia is characterized by these three indicators as a developing economy whereas Australia is an advanced economy on all facets of its growth and development.…

    • 1727 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Daktronic case

    • 1176 Words
    • 5 Pages

    The economic recession that began in 2008 continued to hamper the U.S. economy in 2010. The global recession was affecting many nations.…

    • 1176 Words
    • 5 Pages
    Good Essays
  • Good Essays

    In 2008 there was a significant banking crisis that led to "the great recession," during which millions of people lost their homes, their jobs, and their standard of living. This disaster was caused by reckless behavior on Wall Street.…

    • 222 Words
    • 1 Page
    Good Essays
  • Powerful Essays

    The recession of 2008, which we are only just starting to come out of, happened as a result of a few major factors. The primary factor was the deregulation of banks during the Bush administration. Another factor was that banks offered loans without looking into the financial stability of borrowers or businesses. Also, credit unions, savings and loans, and banks entered into competition with each other. The Security and Exchange Commission, S.E.C., reduced requirements so that banks could pile up debts.…

    • 1376 Words
    • 6 Pages
    Powerful Essays
  • Better Essays

    Stimulus Package

    • 1492 Words
    • 6 Pages

    The Australian government believed that a fiscal stimulus was the solution to protect the Australian economy from the GFC, a crisis that was over hyped and over emphasised by the media. There is little evidence, however, to show that any positive changes in the Australian economy, to date, were a direct result of the fiscal stimulus.…

    • 1492 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Capital City Budget

    • 2205 Words
    • 9 Pages

    Washington, D.C. is the capital of United States and is the exclusive jurisdiction of the Federal government and therefore does not belong to any state. The centers of all three branches of the Federal government are in the District, including the Congress, President, and Supreme Court. Washington is home to many national monument and museums, which are primarily situated on or around the National Mall. The city hosts 176 foreign embassies as well as the headquarters of many international organizations, trade unions, non-profit organizations, lobbying groups, and professional associations.…

    • 2205 Words
    • 9 Pages
    Powerful Essays
  • Powerful Essays

    Sharing the pain; dealing with fiscal deficits. (2010, March). The Economist, 394(8672), 95-98. Retrieved October 1, 2011, from ABI/INFORM Global. (Document ID: 1978193741).…

    • 1687 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    The Great Recession that began in late 2007 caused many downfalls such as real estate collapse, financial crisis, and major loss of jobs. This recession lasted until 2009 which to this day researchers say that the after math of the recession has yet to decease. The economy has not yet gone back to the way it was before the recession started. Did you know that during the Great Recession Australia was not fazed by this horrible time? There are many reasons why Australia did not faze this troublesome time, but one main reason why is because right before the Great Recession they had raised their minimum wage to $13.47 in 2006. Then they raised it…

    • 775 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    The best way of assessing a country’s external stability is to look at the sustainability of its external accounts, in particular the country’s foreign liabilities and the CAD. Since the 1980’s Australia has persistently had a large deficit on the current account, Australia has paid out more for goods, services, income and transfer payments than it has received from overseas. As a country it is irregular to have a CAD, usually countries aim for their economy’s to generate surpluses. The CAD as a percentage of GDP is the best measure of trends in the current account over time, rather then the size of the deficit in dollar terms. In the 1970’s GDP was calculated as a percentage and the CAD averaged at 1.1%, in the 1980’s its average was 4.3%, this increase was viewed as a trade problem, and believed it resulted because of an imbalance of goods and services. This large increase on the deficit lead to major structural reforms to restore the competitiveness of the economy. Instead of being seen as a trade gap it’s now perceived to be a savings and investment gap that…

    • 1637 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    The Recession of 2008 caused widespread panic and distress globally. Trillions of dollars were lost during this time. It was a frightening time for people because they were unsure of what was to come regarding their situations. These losses of money lead to a decrease in consumer spending, which decreased the GDP. This then invoked companies to lower salaries and cut large numbers of their employees. The huge loss of jobs made the unemployment rate skyrocket. All of these consequences of the Recession put many people under stress and lead to an increase in poverty in working class families. The documentary, Inside Job, covered the causes and consequences of the Recession in great depth. There are many underlying causes that lead to…

    • 373 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Fiscal policy primarily deals with the levels and composition of taxation, spending and borrowing by the Government. A sound fiscal policy is essential for preventing macroeconomic imbalances and realizing the full growth potential. In order to address the structural problems in the tax system and tax administration, the government has been introducing wide-ranging tax and tariff reforms, as well as reforms in tax administration. These reforms have already started yielding handsome dividends. During the last seven years, tax collection by the CBR has increased by 130.0 percent – that is, more than doubled.…

    • 12221 Words
    • 49 Pages
    Powerful Essays
  • Good Essays

    Gattaca

    • 487 Words
    • 2 Pages

    which furthermore benefits our economy. Another significant aspect to consider in regards to the future is “Education”. Education in Australia compared to the less fortunate types of countries is quite enhanced in terms of the faculties available as well as the staff available. We…

    • 487 Words
    • 2 Pages
    Good Essays
  • Best Essays

    The fiscal responsibility legislation has been considered as the fiscal profligacy by all economic experts. New Zealand was the first exemplar of this particular act in the year 1994 and is cited as the country that has had a successful outcome of this law. This Fiscal Responsibility Act has been accepted by many experts as a model, and from an economist’s point of view, it is conceptually and theoretically elegant. However it is very important to highlight that the enactment was passed by a government who gave up control over the central bank and also the fact that it was already committed to a very tight Fiscal Policy.…

    • 2724 Words
    • 11 Pages
    Best Essays