Economic problems are affecting a whole economy that needs to be identified as soon as possible in improving current development requirements. This report emphasises on selecting two economic issues that are inflation and environment sustainability. This report is all about explaining impact of all the issues on the Australian economy also depicts the action taken by Australian government in order to resolve the issue.
Impact of economic issues on Australian economy and management of issues by Australia government
Economic growth of a country is an economic issue as this is associated with various factors which needs to be considered by the economy as the increase or decrease in the current economic structure will in turn related lost of changes on other aspects connected with them. Higher economic growth shows the ability of an entity as it shows the efficient areas on which all the business users located in an Australian economy focuses in order to generate higher revenues by boosting the performance of existing factors included in a whole economy.
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Economic growth of Australia will be determined by an individual by emphasises on various aspects associated with it as an entity owner will analyse all the factors and their current position in order to determine the actual economic growth of a country. Several factors on which the current status of economic growth of Australia is depends includes inflation, GDP, population and business trade takes places among one country to another as the actual condition of an economy will be easily determined by verifying the current status of all these factors by linking their performance with the current economic growth rate of Australian economy.
Inflation is regarded as biggest issue which is suppressing the economy of an Australia as it is a process which depicts the price stability come into existence when prices of all the products remains the same over a certain period. The increase in a price at lower or decreasing rate shows the deficiency of a whole economy who are unable to manage the price fluctuations. These fluctuations need to be regulated as this will directly affect the overall performance of a country (Yadav, Singh and Kumari, 2015). In economic terminology, inflation comes under macroeconomics as this related with the price of a product which decreases in relation to a demand for that product. Economic performance of a country needs to be identified in advance as the individual performance of a business is linked with the overall country's performance. Factors are required to be identified that held responsible for inducing the existing market status. Various sector's skills and the capabilities need to be analysed as this may affect an entity's entire aims and targets.
Goals and the objectives of a business are created in accordance with its current market position as the market position of a business is highly concerned with outcomes generated by them by beating all the market rivals exists in the external business environment.
Another important factor that need to be considered by an economy while assessing the existing economic growth rate of a country as linked factors are also required to be analysed by an entity. Analysis of al the factors related with the positive or negative performance of an entity will be identified to uplift the current business conditions of an economy competing with various economies on a global level. Gross domestic product shows the revenue generated by an economy from its domestic manufacturing of various good or services in order to improve the quality of all the services offered by them to its clients. GDP of Australia is 1339.54 Billion currently which shows the higher performance of the whose economy who have managed all its negative actions by promoting positive aspects. The GDP value of Australia presents 2.16 % in relative form. It has been seen various increasing changes in the current GDP level from previous period that shows all the efforts applied by an economy in inducing its performance which in turn creating its entire value on a global level (Leuz and Wysocki, 2016).
Population of Australia also participated in inducing or suppressing the economic growth of an Australia as the role of all the business entities located in the current country gets increases with the increasing population. Demographical segment of this country shows that various backgrounds and ethnic group of people located in Australia. Current population of Australia is around 24,487,300 in 2017. This country ranked as 52nd position in terms of most populated country in the whole world. The current position of this country shows that current population of this country is overcrowded as this will benefit an economy in terms of providing employment opportunities, generating revenue through taxes to the Australian government. Exploring different opportunity is regarded as one of the important factor which will be consider by an entity owner as the population in a country will inspire business in order to expand their current market share in the same country or in country on a global level in order to induce the economic growth rate of their host country.
Business sector in Australia is Uncertain as no one will predict the actual condition of a business concern with the external market changes. The scope of the business has contacted due to higher imposition of inflation incurred in an economy which forced all the investors in order to withdraw their share from a firm. The current step taken by all the investors decreases the overall brand image of an enterprise in the external business environment (Bone, 2017). The reaction of firms in an economy is negative as the inflation will affect its overall performance in terms of contracting its entire market share as all the investors will withdraw their investments from an entity as in an inflation an entity has scope of earning. Decreasing chances of revenues and returns entire growth of business also gets reduces which in turn decreases the brand image of an entity in the external business environment.
Inflation is not treated in a positive sense as this will affect an economy only in negative sense as this created lots of changes in the balance of payments sector as the import or export is heart of every country as they earn most of the sales and the revenue through exports and as they main motive is to minimise its current imports by maximising its current exports from the country to other sectors of world. An entity generates higher revenue with the help of these import or export but due to decreasing prices in a country this directly affected the balance of payment by creating negative changes in the balance of trade as the negative ash flows are increases in relation to the positive cash inflows in an entity.
Impact of Economic growth on Australia
Inflation rates are declining from one period to another period shows the ability of an entity in order to generate higher returns by managing all kinds of costs incurred in a country. Consumers would be very happy with the current state as lower inflation rate will generate higher returns for an entity in producing higher return but increasing interest rate remains one kind of challenge for an economy that needs to be improved with the passage of time (Chapra, 2016). The current inflation rate of Australia has compared with the other country's economy and has found that other economy's inflation rate is higher by 1% that shows the higher performance of Australia. The economic growth of Australia is less than compared to the inflation rate show the negative impact as the officials of a country are not capable in managing the economic condition of a country. It has been noticed 2.1% in first quarter which shows less imposition of inflation pressure on a country reflects the ability of Australia in generating fewer rates (Chapra, 2016). The reason behind the current inflation rate is fewer costs incurred in an economy as Australia has emphasises on identification of all the symptoms held responsible for this uncertain action in order to improve their overall performance within a given span of time. In relation to the current inflation rate, it has been found that increase in the current inflation rate is less but the costs of transportation and food or beverage is increasing year by year which are regarded as the common areas where large population spend their money (Leuven and Sianesi, 2015).
Economic growth of Australia has risen by 1.7% which is less than compared to the inflation rate in the country show the deficiency of the system in managing the uncertain action imposed on an economy.
Gross domestic product of an Australia reflects its skills and capabilities that are used in order to generate higher returns over a certain period. GDP is taken as important factor of increasing or decreasing the entire economic growth of Australia as the desired aims and the objectives of a country need to be satisfied properly in order to grab higher market advantage on the external business environment. Various categories of GDP will affect an economy's overall performance such as growth rate which is increasing from 0.30% to the highest rate of 4.40%. Annual GDP growth rate also increases as this is occurred due to higher efforts applied by an economy in improving the overall performance of all the business located in a country. GDP rate is 2.16% which is higher than compared to the inflation rate and also higher than the economic growth rate.
Demographical structure of Australia shows the status of population of Australia by covering all important segments of Australian country. It can be evident from the data statistics that is in total 1.5% changes has taken place in the population of Australia. The Highest changes in the population has done in the area of Victoria in Australia which is famous for housing real estate which attracts majority of people from all across the world. This increases the revenue in a country which in turn helpful in increasing the current economic growth rates.
Businesses of every economy generates higher sales and the revenue for a government as the income generated by an entity in a particular year. Taxes charged on the income of a business produces tax revenue for an economy. The efficiency of all the Australian businesses are assessed in relation to the three parameters such as net entry rate, entry rate and exit rate as this will induce the strength of an economy. Structural challenges have created negative impact on the normal and daily routine functioning of entire economy. Competitive pressures faced by Australia need to be recognised at the initial stage as speculation of prices is regarded as the basic motive of an entity in order to gain competitive advantage in the external business environment. Pressures of the external environment are required to be identify by the officials of the government as their main motive is to improve the overall business performance of an entity within a given span of time (Bone, 2017).
Climatic change is regarded as one of the important issue's comes under the category of sustainability of environment. Change of weather climatic changes created loss of changes for all the local residents of Australia as this also decreases the total visitor's count in this country who visit this country for enjoying their holiday properly. Environmental conservation is another important issue in Australia that needs to be managed properly by considering all the factors that enhances the overall value of a country by enhancing the overall worth of the whole economy (Capaldo, Izurieta and Sundaram, 2016). Conservation in Australia is related to the procurement of precious fauna who found in the Australia along with the flora that are the speciality of this particular place. This is one of the biggest issue in Australia as it has poor record of keeping all the native fauna within this particular country for long period as most of the animal species are extinct. Marine conservation is also regarded as the major issue as in this important species are required to be safeguarded in order to improve the value of a country that maintains its marine environment by taking care of each and every species of marine by feeding them properly and also take care about its health and well being as n disinfect specie will affect the whole species that needs to be identified properly in order to separate all the species which proves dangerous for other living beings or mammals.
Impact of environment sustainability on Australia
The condition of the environment sustainability is poor as it has degraded the whole environment as the temperate zone of Australia along with its coastal system. The existing condition of the Australian environment will be analysed as this will affect its overall performance. Increasing deforestation in Australia is reducing the quality of land as it increases the number of barren lands that can't be use for commercial purpose as this decreases the source of production for a country which in turn affected a country in bad manner. With the increasing number of deforestation, 7% of the agricultural area has captured in the current uncertainty.
According to the study of CSIRO that staffs for commonwealth scientific and industrial research that costs of degradation of land is costs around $1 billion that imposes immense burden on an individual (Capaldo, 2015). Current burden imposed on an entity needs to be managed properly as this affects a country in negative way. Estimation of all the costs is essential at initial stage as an economy will protect its interests by recovering all kind of costs with the improvement of all the existing business operations in the best possible manner.
Illegal fishing is one of the activities covered in Australia which are not restricted by law but these practices needs to be managed in order to reduce its pressures. Overfishing practices needs to be regulated as this is affecting the existing marine environment as overfishing up to a certain limit will affect all the water species. Any act out of the legal permission is termed as illegal in the eyes of law.
Increasing pollution in a country will increases the global warming which in turn create changes in a climatic condition that are required to be managed properly. Normal life of all individuals such as local residents as well as animals got disturbed with the climatic or weather changes takes places in Australia affected its economy in economical way as majority of visitors or tourists will not visit this place due to frequent changes takes places in its weather.
Sustainability indicators will be identified as this would help an individual in order to understand the current pressure and its effect on the overall environment of Australia (Setterfield ed., 2016). Various themes have developed in order to manage the conditions of all the factors covered under environment sustainability such as skills and education, health and institutions and governance.
Sustainability programs are created by government officials in order to improve existing society as their focus lies on generating higher output by using less input. The major themes prepared by the officials includes social and human capital, natural capital and economic capital as these three major categories would cover all important themes under which various policies are planned by a country in improving the current conditions.
Management of Issues by government
Australian government has specifically launched new policy in order to reduce the impact of environmental issues currently faced by an environment. Sustainable development is that process in which present needs of all the users are fulfilled in such a manner without compromising with the needs and expectations of the future users. Environmental sustainability policy emphasises on analysing all present resources as all these resources are improved in relation to various parameters selected by a country (García and et.al., 2015). Weaknesses or problems of environment are taken as important measures of the improvement. Standards in form of code of ethics are required to be followed by a country resident in order to avoid negative impact of economic issue on their daily routine. Environment management issues which are covered in the current policy includes energy consumption, greenhouse gas emissions, waste reduction supplies and potable water use. All these aspects are covered in a policy as the major emphasises of official is to eradicate all kinds of problems currently exist in Australian country in order to safeguard its residents as this leads to the spread of severe diseases in the environment.
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It can be summarised from the above report that two economic issues have identified in the report such as inflation and environment sustainability. Out of the two economic issues discussed in a report the most negative impact created by an economic issue that is inflation. The inflation level of Australia is higher than compared to its economic growth. Inflation rate is 2.1% as compared to the economic growth of Australia is only 1.7% the differences arises among these two shows the deficiency of Australia.
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