The Australian performance for the past three years is dominated by economic downturns. Recently, Australia is facing two crucial issues in their economy, those are increasing budget deficit and house affordability. In the long term, those two issues can deteriorate the economy. First, the increasing budget deficit affect to an increase in the Australian debt that may deteriorate the economic growth. Second, as the housing prices go higher and significantly overvalued, the Australian economic growth slowly and affect the Australian economy. The Australian government and The Reserved Bank of Australia (RBA) need to overcome new fiscal policy and monetary policy in order to maintain these issues. This essay will argue that government’s policies …show more content…
According to data on trading economics, the budget deficit in Australia happened since 2008. Pash (2016) stated that Australia deficit currently is sitting on 41.7 billion dollars, 4.3 billion dollars higher than expectation. It will be estimated that Australia deficit will reach almost $ 129 billion in 2018/2019. An increase in budget deficit leads to the raise in Australian debt that affect Australian economy to be under threat. Australian debt recently is A$ 400.89 billion, increases significantly for about 32.16 billion dollar from 2015. Janda (2016) reported that Australia is the biggest AAA country since 2009 that has the highest increasing debt. An increased debt affect to the decline in the Australian economic reputation. As Janda (2016) points out, Australian sovereign rating decline one point downgrade from AAA to AA+. The deteriorates of the Australian economic reputation influence the investor confidence. As the time went by, the Australian economic growth will decline because there is no revenue to be gained from the investor. In consequence, the only possible method to pay the debt is raising tax for future generation. According to Wood and Daley (2014), an increase in $40 billion deficit will affect to tax burden $10.000 for
Throughout Eveline Adomait and Richard Maranta’s Dinner Party Economics there is continuous discussion surrounding the problems that economies face around the world and the various methods that can be used to alter the state of the current economic conditions. Changes in consumer spending patterns can become a problem for the economy as a whole, potentially resulting in over-inflation or recession. Implementing discretionary policies such as monetary policy through changing interest rates, and fiscal policy through taxation and government spending, makes it possible to fix these economic problems.
This paper aims to discuss the Short-Term and Long-Term Impacts of the Great Recession and
A balanced stance on fiscal policy was targeted by the Government in response to the global recession between short and long-term policies. These measures involved bonus payments to low and middle-income Australians to insta...
The Australian Budget is an annually published document which details the Federal Government's plans to affect the level of economic activity, resource allocation, and income distribution through the use of fiscal policy. It describes the framework which the government intends to follow during the next financial year which will result in the attainment of their objectives. The budget is a publication of the government's plans regarding the use of fiscal policy, and is published to parliament and the general public on “budget night”, so as to allow open dissemination about the status of public finances and to promote transparency in Australia's fiscal policy.
The national debt surfaced after the revolution when the United States government had to borrow funds from the French government and from the Dutch bankers. By 1790, the U.S. government accumulated millions in debt, but no one knew precisely how much. The Constitution mandated that the new government take over the debts of the old government under the Articles of Confederation.
Every day in New York City, hundreds of people walk past a huge digital billboard with giant numbers across its face. Each person who walks past this billboard sees a slightly different arrangement of numbers, growing larger every second. This board is the National Debt Clock, representing the over 14 trillion dollars currently owed by the United States. While some people claim that the national debt is caused by the falling economy, most maintain that the debt itself causes the poor economy (Budget Deficits 2007). Rising debt leads to higher interest and investment rates, and cuts into our national savings. Ignoring the national debt leaves the major burden of paying it off to later generations, while meanwhile allowing our country’s economy to further drop and our dependency on other nations to rise.
Reserve Bank of Australia (2010). Minutes of the monetary policy meeting of the board – 3 August 2010. Retrieved August 20, 2010, from http://www.rba.gov.au/monetary-policy/rba-board-minutes/2010/03082010.html.
"Australia." Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. N.p., n.d. Web. 2 Dec. 2013. .
The U.S budget deficit over the years has been a problem but lately the deficit has shrunk. However, what made the U.S budget deficit get to where it is today and what will it be like in the years to come. Throughout the past the U.S has operated under a deficit. This means that the U.S Spent more money than it was taking in. The cause of the excess in spending was different depending on which year. Some of the causes were war, increase in spending , and economic downturns. There were different acts passed to try and control the deficit problem. The deficit at the present time is declining. This decline is due to the improving economy, sequester, and a tax increase on high-income households. The big factor that went into the decline in the deficit for 2013 was the payment that Fannie Mae and Freddie Mac made. The deficit decline in the present time may make some think the U.S could get out of debt but it has been projected that the U.S deficit will start to increase once again.
A referendum has been a relatively effective mechanism in facilitating the shift of power from the States to the Commonwealth. The referendum (section 128) is a concept that aimed to change the wording in the Australian Constitution to give the commonwealth more specific powers. This is done through the passing of the constitutional alteration bill through parliament. Since federation, all citizens have the right to vote in referendums with any proposed changes either being accepted or rejected by the people. The way this works is that the Governor general authorises a referendum and this referendum must meet dual criteria in order to be successful for instance, the federal criterion which is having a majority of states and democratic criterion; having a majority of voters. The Commonwealth has tried to use the process of the referendum to shift power. For example, the referendum for Constitutional Alternation (Aboriginals) in 1967 aiming to remove racial discrimination, such as including them in
The Commonwealth Bank is accused of breaching the money laundering laws. The Bank is one of the biggest and leading in the financial sector. The allegations tend to show that the bank’s compliance system failed to detect the alleged breaches. The allegations are serious because they have created a public relations issue that has drawn attention and interest of different stakeholders and publics. Some of the consequences evident as a result of this issue are that investors have dumped the bank’s shares leading to falling in price by about 4%. From a public relations perspective, this is an issue that has to be addressed immediately in order to protect or repair the bank’s reputation and image from damage. The discussion in the report shows that
Australia has had one of the most outstanding economies of the world in recent years - competitive, open and vibrant. The nation’s high economic performance stems from effective economic management and ongoing structural reform. Australia has a competitive and dynamic private sector and a skilled, flexible workforce. It also has a comprehensive economic policy framework in place. The economy is globally competitive and remains an attractive destination for investment. Australia has a sound, stable and modern institutional structure that provides certainty to businesses. For long time, Australia is a stable democratic country with strong growth, low inflation and low interest rate.(Ning)
According to askheritage.org the Washington Post reported that the national debt is no longer unsustainable. It seems like national debt is not government’s high priority anymore. However, there are plenty of reason why reducing the national debt should be the most urgent problem that the president and congress should address in 2017. The effect that the national debt can have on the economy is tremendously impactful. Cost of living will rise because the government will find a way to collect money by putting higher interest rate on anything from credit card from house mortgage. There will be a generational inequality because by not being responsible for the current generation’s debt, people are giving burden of reducing debt to our next generation which will threaten their standard of living and retirement plan. It cause slower wage growth. Instead of making productive investments, money goes to buying government debt. The debt have huge impacts on fiscal policy. Economicshelp.org defines fiscal policy as a policy involves the government changing the levels of taxation and government spending in order to influence Aggregate Demand (AD) and the level of economic activity. The federal debt cause reduction of fiscal flexibility. Between 2008 and 2013 the GDP increased from 35 percent to 70 percent due to the Great Recession. Because of high debt, our government is not
Everyone has their own political leaning and that leaning comes from one’s opinion about the Government. Peoples’ opinions are formed by what the parties say they will and will not do, the amounts they want spend and what they want to save. In macroeconomic terms, what the government spends is known as fiscal policy. Fiscal policy is the use of taxation and government spending for the purposes of stimulating or slowing down growth in an economy. Fiscal policy can be used for expansionary reasons, which is aimed at growing the economy and increasing employment, or contractionary which is intended to slow the growth of an economy. Expansionary fiscal policy features increased government spending and decreases in the tax rates as where contractionary policy focuses on lowering government spending and increasing tax rates. It must be understood that fiscal policy is meant to help the economy, although some negative results may arise.
Several financial statements have been prepared to describe the causes of this current financial failure. There are a variety of factors that has resulted in the explosion of this financial crisis. Downfall of the US housing market; highly benefited financial dealings and a low interest-rate promoting borrowings, have all contributed to the recession monetary market. Let us now consider these various reasons in a little detail.