Why does australia have a prosperous economy

It will be important that this cost is absorbed without compensating households through higher wages, while recognising this may be painful in the short-term. Otherwise, the positive effects of the depreciation in terms of boosting the international competitiveness of Australian businesses will be offset by cost increases. This is because higher productivity would further enhance the international competitiveness of Australian firms and provide some scope for paying higher wages. Job losses in certain industries may be concentrated in particular geographic locations.

When this occurs, there is a case for seeking to reduce some of the costs of adjustment for those individuals adversely affected by structural change. As well as more equitably sharing the costs of adjustment across the community, providing assistance may also improve community acceptance of difficult changes. This suggests the need for policy action across a broad front and consistently focused on improving the growth prospects of the Australian economy.

For copyright reasons some linked items are only available to members of Parliament. With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3. Australian Parliament House is currently closed to the public. Robert Dolamore, Economics Key issue With resources sector investment probably having peaked, other sources of demand will need to strengthen if the economy is going to grow at a rate consistent with full employment.

How smoothly this transition unfolds will have important implications for Australian living standards. Economic policy can play an important role in supporting this transition.

Macroeconomic policy The macroeconomic environment exerts a strong influence on the economic decisions of households and businesses, and hence on the level of economic activity. So what do we take from these figures? Unfortunately, not much. They mostly look good in comparison to the worst of times last year and bear little resemblance to the economy we are currently in just three months later.

The economy, off the back of large government consumption and investment and household spending, had recovered much better than hoped a year ago. But a year ago we also were hoping that once we had a vaccine available, lockdowns would be a thing of the past. This article is more than 2 months old. Greg Jericho. That jump in household consumption mainly. Read more. Topics Australian economy Grogonomics Coronavirus Vaccines and immunisation comment. Reuse this content.

But will the Morrison government be willing to use fiscal policy to help drive unemployment down to the 4 per cent mark? Australia has neglected its young workers for long enough — they must be a top a priority in the post-pandemic recovery.

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Borland says additional government spending to support employment growth would be worth it. License this article. Jobs Opinion. Connect via Twitter or email.