The Australian Government’s Implementation of the Economic Stimulus Plan

752 Words2 Pages
bulb-icon

Recommended: Australia economic conditions

Inflation can be described as the sustained increase in the general level of prices over a given period of time, usually one year. Inflation can have negative effects on many of the key economic outcomes such as economic growth, exports, international competitiveness and income inequality. Inflation is measured in Australia by the Consumer Price Index (CPI); the CPI outlines the movement in the prices of a basket of goods and services that are weighted according to their importance for the average Australian household. The annual rate of inflation is measured by the percentage change in the CPI over a period of a year, highlighted in Figure 3.1 . Recent Trends in Inflation Australia’s most significant macroeconomic achievement of recent years is the sustained decline in inflation rates from the early 1990s. After two decades of high inflation Australia reduced its inflation rate and managed to maintain its lowest level of inflation since the 1960s, indicated by Figure 3.2 . The year of 1993 marked a significant change in Australia’s approach to inflation with the implementation of an inflation target average of 2-3% over the course of the business cycle as a guide to determine interest rate decisions. This inflation target was formalised in 1996 through an agreement between the Treasurer, Peter Costello, and the Reserve Bank of Australia’s Governor. Since its application, inflation has stayed within this target band, with exception of the introduction of the Goods and Services Tax (GST) in 2000. Both headline and underlying inflation have averaged 2.7% between 1996-2009. Inflationary pressures peaked between 2005 and 2008, with underlying inflation spiking at 4.7% due to a combination of higher global prices and the stre... ... middle of paper ... ... News Limited 2009, ‘Rudd stimulus package protected jobs: OECD’. Retrieved May 23rd, 2010, from - http://www.news.com.au/business/rudd-stimulus-package-protected-jobs-oecd/story-e6frfm1i-1225775501075 Tim riley book Riley, T. (n.d.). Year 12 Economics 2010 (pp. 164-216). Wayne Swan 2009, ‘Budget Speech 2009-10’, Australian Government. Retrieved May 20th, 2010, from - http://www.ato.gov.au/budget/2009-10/content/speech/html/speech.htm Wayne Swan 2010, ‘Budget Speech 2010-11’ Australian Government. Retrieved May 20th, 2010, from - http://www.budget.gov.au/2010-11/content/speech/html/speech.htm Westpac Institutional Bank May 2010, ‘Westpac Market Insights Australia, New Zealand, G3 & China’. Retrieved June 6th, 2010 from - http://www.westpac.com.au/about-westpac/media/reports/australian-economic-reports/

Show More
Related

  • Relative Scarcity In Australia

    751 Words  | 2 Pages

    Australia’s resources otherwise known as factors of production – natural resources, labour, capital and enterprise, are relatively scarce, resulting in the economic problem of relative scarcity as we cannot satisfy all our needs and wants in Australia as they are unlimited. Collective and individual wants are

    Read More

  • Stephen Harper Open Federalism

    1466 Words  | 3 Pages

    Lazar, Harvey. “The Spending Power and the Harper Government.” HeinOnline. 34 Queen's L.J. 125 2008-2009

    Read More

  • The Evolution of the Federal Budget Process

    997 Words  | 2 Pages

    For government budgeting to be effective, the process that guides it must be an evolving one. As the government gets bigger, it will most likely destabilize the existing method. Therefore, it must change to keep pace with the demands and growth of the country. The process must be capable of handling the complexity of our nation and its multifaceted needs so it will always need revisions and restructuring to face these new challenges. Its ultimate goal must be to reinforce the government and strengthen the country.

    Read More

  • Marketing Strategy and Company Analysis – Optus

    2250 Words  | 5 Pages

    Permatasari, S (2011, 7 August) Australia’s Economy has Strength to meet challenges, Swan Says; Bloomberg, Retrieved from http://www.bloomberg.com/news/2011-08-07/australia-s-economy-has-strength-to-meet-challenges-swan-says.html

    Read More

  • The Homeless in Canada

    2623 Words  | 6 Pages

    Canadian Centre for Policy Alternatives, Alternative Federal Budget 2011, Report: Rethink, Rebuild, Renew (pg. 69, 70, 72, 75) Retrieved from: http://www.policyalternatives.ca/AFB2011

    Read More

  • Economics of Haiti

    2353 Words  | 5 Pages

    "Australia." Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. N.p., n.d. Web. 2 Dec. 2013. .

    Read More

  • The Impact Of Quebec Nationalism In Canada

    1911 Words  | 4 Pages

    Lazar, Harvey. “The Spending Power and the Harper Government.” HeinOnline. 34 Queen's L.J. 125 2008-2009

    Read More

  • The Australian Government

    1379 Words  | 3 Pages

    When you think of the “land down under” you don’t really think of the kind of government they have. I chose to write about the Australian government because I really don’t hear much about Australia. It currently has a pretty interesting story to tell when it comes to their government. I became a bit interested in Australian politics when I saw a political animated cartoon on the internet that depicted Kevin Rudd, the last Prime Minister, on a news television show and it was quite humorous. I am going to give a quick history lesson on Australia then go into how the government formed and came to be. Then I will talk about the Australian constitution, the Australian arms of government, their federal system, political parties and Australia’s current Prime Minister.

    Read More

  • Essay On Government Spending

    1956 Words  | 4 Pages

    Government spending is a highly debated topic as to how much money should be spent and how it should be spent, but the fact remains government spending is rising each year and will become unsustainable in the future without major changes. Government spending is currently around 40% of GDP as compared to 7% at the start of the twentieth century (Chantrill, NP). Government spending has had ebbs and flows that can be traced since the start of the twentieth century, which include two world wars and a great depression. However, from the 1980’s through the early 2000’s government spending was lower to mid 30% range of GDP (Chantrill, NP). Increase in spending has been seen since the stock market crash of 2008, to the current levels of around 40% of GDP (Chantrill, NP). Various reasons are behind the major increases of government spending, but the “...

    Read More

  • Marketing Strategy For Australia

    1208 Words  | 3 Pages

    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)

    Read More

  • Wealth Inequality

    1078 Words  | 3 Pages

    ... the safety net of modern awards, the ten national employment standards introduced by the fair work act 2009, and annual adjustments to the National minimum wage provided minimum levels of income and working conditions to workers with low skills and low bargaining power in the labour market. Other components include government spending on public health, education, housing, transport and community services which provide a safety net for low income earners. Macroeconomic policies such as monetary and fiscal policies supports aggregate demand as the GFC and recession impacted adversely on the Australian economy. The main concerns were to support economic growth, household incomes and living standards in the short term, to minimise the increasing rate of unemployment in the medium term, and increase public investment in infrastructure to increase productive capacity.

    Read More

  • Rising Inflation in the UK

    1391 Words  | 3 Pages

    Inflation; ‘a situation in which prices rise in order to keep up with increased production costs… result[ing] [in] the purchasing power of money fall[ing]’ (Collin:101) is quickly becoming a problem for the government of the United Kingdom in these post-recession years. The economic recovery, essential to the wellbeing of the British economy, may be in jeopardy as inflation continues to rise, reducing the purchasing power of the public. This, in turn, reduces demand for goods and services, and could potentially plummet the UK back into recession. This essay discusses the causes of inflation, policy options available to the UK government and the Bank of England (the central bank of the UK responsible for monetary policy), and the effects they may potentially have on the UK recovery.

    Read More

  • Inflation And Inflation Essay

    1766 Words  | 4 Pages

    Inflation is the rate at which the purchasing power of currency is falling, consequently, the general level of prices for goods and services is rising. Central banks endeavor to point of confinement inflation, and maintain a strategic distance from collapse i.e. deflation, with a specific end goal to keep the economy running smoothly.

    Read More

  • Public Sector Reform Essay

    952 Words  | 2 Pages

    The recent delivery of the National Commission of Audit (NCOA) report to the Australian Government (NCOA, 2014) has generated significant discussion in the public domain with regards to the report’s recommendations. Part B of the NCOA’s report outlines governmental and public sector reform, both from the perspective of the programmes delivered by government and the government institutions that administer said programmes.

    Read More

  • The Advantages And Disadvantages Of Line-Item Budgeting

    840 Words  | 2 Pages

    Line item budgeting categorizes various expenses and places them in list format on a document for budgetary purposes. This type of budgeting is considered the heartbeat of budgeting due to the systematic method by which it controls revenue and expenses, this is made evident when Tyer and Willand (1992), pointed out “Statutory or administrative controls could be imposed on the transfer of funds from one-line item to another, or between broad categories of expenditure.” According to Schick (1971), “line item budgets were attractive to legislative officials because they did not focus explicit attention on substantive policy issues or choices.”

    Read More

More about The Australian Government’s Implementation of the Economic Stimulus Plan

Open Document