CURRENT MACROECONOMIC CONDITION AND RELATED FISCAL POLICY
This paper will use macroeconomic indicators to build a picture of the current macroeconomic condition in Australia, particularly in June quarter 2015. The main indicators discussed include GDP, unemployment rate, CPI and interest rate. Other relevant indicators such as exchange rate will be discussed under the main indicators. Further, relevant fiscal policies will be reviewed following the current macroeconomic condition under each indicator. In the conclusion, this paper will highlight the Australian Government’s current budgetary condition and its policies.
As illustrated in the table 1 (ABS, 2015), there has been a slowdown in economic growth through the year ended June quarter
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The conflict between the decreased aggregate demand and the stable unemployment rate can be explained by lower population growth and very low wage growth, which may encourage the employer to retain staff when profit growth is modest.
Generally, the current labor market has proven more resilient than expected, but there is still evidence of spare capacity in labor market. It is shown that some employees are working fewer hours than they desire. Also, the labor force growth shows a trend of rebalancing the demand away from the resource investment to service sector and dwelling investment. As is discussed before, the service sector has developed quickly due to the depreciation in exchange rate.
Due to lower-than-expected wage growth and the spare capacity in labor market, the tax receipts from individuals are estimated to be $16.4 lower over the past four years to 2017-2018 (Budget, 2015). In order to improve the situation, the Australian Government provides the job package which makes it easier for the unemployed, particularly young people, to move into long-term employment. The $4.5 billion Families Package also provides more support to Australian families in order to assist the workforce
First, I will discuss the time period between 1973-1974. Because the unemployment and inflation rates are higher than normal, we can assume that the aggregate-demand curve is downward-sloping. When the aggregate-demand curve is downward-sloping, we know that the economy’s demand has slowed down. When the economy’s demand has slowed down, businesses have to choice but to raise prices and lay off workers in order to preserve profits. When employers throughout the country respond to their decrease in demand the same way, unemployment increases.
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.
As a result of the Great Recession of 2007 to 2009, the United States government implemented various fiscal policies in an effort to stimulate the economy. How the government responded as well as how those responses will affect the U.S. economy into the future are the focus of a proposed research study. In order to ensure an appropriate focus for the proposed research study, problems in existing literature must be evaluated.
Monthly Unemployment for 2000-2001 was lower than average, but reached 5% towards the end of 2001. Overall unemployment steadily increased during 2001. The highest point was reached in December of 2001 at 5.7%, while the lowest point was at 3.8% in April of 2000. Controlling unemployment is discussed later in the paper.
In today’s economy, fiscal policy plays a vital role in influencing the financial direction and economic goals of the United States. Furthermore, government spending and taxation are two main economic activities that influence a nation’s economy and are generally referred to as the fiscal policy. Not only does the fiscal policy help determine a nation’s budget, but it also determines how much resources need to be allocated to help achieve their economic goal. Therefore, the fiscal policy has many functions and consists of allocating, distributing, stabilizing and developing the nation’s economy.
"Macroeconomics/Employment and Unemployment." Macroeconomics/Employment and Unemployment - Wikibooks, Open Books for an Open World. N.p., n.d. Web. 04 July 2017.
"Australia." Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. N.p., n.d. Web. 2 Dec. 2013. .
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