Upload
biocity-studio
View
644
Download
0
Embed Size (px)
DESCRIPTION
Manufacturing and exporting natural resources were Australia’s major industries in from 1913 till after WWII. The Australian economy has boomed and had downturns in the past. Currently the economy is only growing at 3.7% per year, inflation has risen to 4.3% and home loans are at the highest in 22 years. In the future fuel prices may increase, economic growth may decrease and climate changes likely create major economic problems.
Citation preview
WHERE WE WEREWHERE WE ARE
WHERE WE’RE GOINGWHERE WE SHOULD GO
Economics
Where we were
The creation of a private economy was essential to the viability of the colony.
Agriculture was established through giving
land grants to senior officials and emancipated convicts.
Since Colonisation (1788 – 1820)
Government was central to the economy. It supplied
goods, money and foreign exchange1820s onwards; economic growth was driven by the
production of fine wool and other rural commodities for Britain and Europe
The expansion of transport,
communication and urban transportation needed British finance
Back to the past (1820 – 1930)
Economic expansion required significant
immigration to meet demand for workers
Rule of law, secure property rights and democratic political systems nurtured growth.
1901: The commonwealth government had a strong capability to intervene in
private markets.
Still in the past
An essential foundation for Australian manufacturing was the introduction of the
first protectionist tariff in 1907.
The Great Depression of 1929 had serious effects for Australia: record high
unemployment, lack of foreign investment and a severe
drop in value of exports.
Wars past (1930 – 1970)
During WWII and after, manufacturing growth did accelerate and the following sectors emerged: Cars; Chemicals Electrical equipment Iron and Steel.
Instability in the world economy and
weakness at home ended the post-war boom.
Forward to the future (1970 – 2005)
By the 1970s, economic reform was well due
Sweeping reform was brought in by the Hawke and Keating Governments and built on by the Howard Government
Up the the present (1970 – 2005)
Floating of the dollar;
deregulation of the financial system;
Removal of protection of manufacturing and agriculture;
Dismantling of the centralised system of wage-fixing; tax reform
Privatisation and elimination of
government monopolies.
Where we are now
Not going anywhere
Primary Industry ≈ $12, 953 millionRetail Trade Industry ≈ $18, 101 millionManufacturing ≈ $34, 368 millionServices ≈ $215, 585 million
Haven’t left yet
NSW’s major exports have moved away from agriculture and
manufacturing.
Now services are the major export.
Exports are currently worth over $47 billion to the
economy
We’re still here
Australia’s Economic Growth (as of Sept 2008) is
3.7%NSW’s Growth is approximately half of that.
It is the lowest of all states.Inflation Rate (basically the rate at which prices are rising [alternatively, the rate at
which the money you have loses its value]) ≈ 4.3% (Sydney)
It is desired to keep this rate between 2-3% so that it does not distort the economy in any significant way.
Still here
In September 2008, the Reserve Bank of
Australia reduced the Cash Rate to
7.0% after 12 consecutive raises.
The Average Per Capita Income is sitting at ≈ $39, 000 up from approximately $30k in 1999
Not gone yet
Servicing a Home Loan now costs
37.4% of your Gross Income. Worst in 22 years.
That’s $3 out of every $8 that you earn!
But after tax, up to 50% of your income can go into your Mortgage.
Looking back
Manufacturing was one of the major industries in Australia from 1913 till post-World War 2
when it was making up 1/3 of GDP.
Natural Resources remained the
most important suppliers of export during this time; Wool ≈ 40% of total exports
Minerals ≈ 10% of total exports
Wheat/Flour = 20% of total
Financial Crisis (in brief)
Lender’s income is proportional to the number of loans they sell = increasingly
risky loans sold.Housing prices/income are deliberately
overvalued to create the illusion of a stable loan.
Loans can’t be re-paid. People forced
to foreclose. Banks run into debt.
Financial Crisis (still briefing)
People lose faith in market; withdraw money; furthering the downturn.
Most loans to Australian Banks are
recalled; forcing a downturn.
Where we’re going (prediction)
Exports will change once again. Will be
worth less to Australian economy due to
sharp increases in fuel prices.
More goods will remain domestic.
Economic growth will begin to slow.
Interest rates will rise again once the current crisis is over
Where we’re going (predictions)
Climate change to create major problems economically. Increase of 2°C = livestock carrying capacity decrease 40%.
Increased road maintenance costs by 31% by 2100.
711, 000 addresses and billions of dollar from coastal damage.
More severe weather including drought.
2006-07 drought slowed economic growth by 0.75%
What can stop us
Australia, and NSW in particular, is still very
reliant on the finite natural resources still available to us.
While resources like coal apparently have
200 years of supply left, global resources (oil) have limited years left.
We can use this as an excuse for not investing as much, as quickly into
renewable sources.
Where we should head
Carbon Pollution Reduction Scheme (2010)
Requires industries to buy Carbon Credits (CC) for each tonne of carbon they produce.
Each credit allows for 1 tonne of COx to be produced.
Allows companies to buy CC off other industries
No Missed exits?
$25 per tonne (based on 2010 nominal terms).
Expecting to make $11.5 billion in 2010-11 in CC sales.
You could build the North West Metro for that
All revenue used to assist homeowners
and small businesses transition to energy efficiency.
Wrong turns?
Increased power bills $4 a week if CC set at $25 a tonne.
Greater assistance to lower/middle income households
Pushes the price of coal higher.
Causes renewable energy options; solar, wind, wave; to be relatively
affordable technologies to pursue.
Follow the rest of the world
The size of the Carbon Market in 2007
was $US 64 billion.Not a new concept.
In 1991, Sweden put a $US100 per tonne tax on carbon emissions. Forced changes in energy use.
That’s 4 times the Australian cost and wasin place almost 20 years ago!
A new hope
There is hope on the horizon.Australia needs to speed up. We may be a
young country, but we can’t let that be a reason anymore.