Australia & Its Economy
The Australian economy is mostly known as one of the most developed economic systems. The Australian economy is characterised by a large service sector, employable labour force, abundant natural resources and a low consuming population.
The Australian economy has been stable for the longest time until the recent recession attributed to the costs of managing the COVID-19 pandemic. Notably, the government and other financial stakeholders are concerned about sustaining the commodity boom currently experienced in the country. The central question is how long the abundant natural resources can use before it thins out?
The Australian economy is not totally in perfect shape. One major weakness associated with the economy is the wide gap in the distribution of income. The proceeds of economic growth are not shared based on the demands of equality and equity. For instance, this is one reason the social gap between indigenous Australia and non-indigenous Australians continues to widen.
Like most countries, the Australian economy is based on the exploitation of natural resources beyond the rate at which they replenish. Hence, Australia has often been regarded as living beyond its means. The country focuses on the extraction sector, which has resulted in the mining boom and consequently affects the exchange rate positively.
This boom has also enabled low import costs. On the other hand, the negative impacts on various sectors are unsettling. It also causes instability of the exchange rate, which is not a sign of sustainable economic development.
The country also benefits from its immigration services. It is popularly known that Australia’s population is relatively small; thus, there is no strict immigration policy to get an adequate supply of labour force and reduce costs on the budget spent on the ageing population. Immigration also positively affects domestic trade growth because it provides more labour to facilitate the production and distribution of goods and services. Likewise, it contributes to tourism development because it creates cultural diversity with significant economic implications.
The country is currently sustained on non-renewable resources, although several policies have been formulated to fight the sustainability of these resources or provide alternatives ahead of total depletion. These policies must not differentiate from environmental or social policy because they all focus on man’s general well-being.
In Australia, most economic policies are managed and enforced by the commonwealth government. First, a small government’s idea avoids the accumulation of debts by the government and prevents budget deficit. Also, the purpose for which revenues are used must identify to keep the government’s size a relevant policy.
Also, a significant sustainability factor is the concentration of resources on other government sectors such as agriculture and education, among others. This step would provide the country with other alternatives to fall back on when the mining boom period ends. Also, the Australian economy can help through green technology development for environmental sustainability. It is because environmental policies and social life policies cannot operate independently of economic policies.
In essence, the Australian government must be deliberate in its efforts to reform the structure of the country’s economy.