Australian Economy Essay Example | Topics and Well Written Essays - 2000 words - 2

Australian Economy - Essay Example The unstable nature of growth however affected the general economic climate in a way. For instance, because the economic wave stability was generally unpredictable, investors could hardly predict what the future held for them in investing in Australia. Specific Governmental and Reserve Bank Economic Policies that were introduced in the last 2 years - Budget The budget has the tendency of deciding the future economic hopes of a country because it serves as the blueprint economic policy implementer. For this reason, the government of Australia took certain important steps by way of their budget that were directed towards ensuring economic growth. One of such policies through the budget was the fact that the government through the budget encouraged the establishment and opening of new small and medium scale businesses by the introduction of Small Business and General Business Tax Break, which was â€Å"expanded to allow a bonus deduction of 50 per cent to small businesses with a turnov er of less than $2 million that acquire an eligible asset between 13 December 2008 and 31 December 2009 and install it ready for use by 31 December 2010† (Australian Regulatory Compliance Review, 2010). Again, the budget was highly focused on human resource and labor in general as the pension age was slightly increased to 67 years. This was aimed at retaining and cheering experience in the labor front and ensuring that the human resource base to man Australia’s economic drive was not depleted. Finally, the government saw a lot of hope in the future of the economy of Australia, planted in the need for the country to be self sufficient as far as production is concerned. For this reason, â€Å"The Federal Government used the Budget to launch a new paper on innovation that powered ideas paper canvasses proposed improvements and incremental changes to the existing National Innovation System† (Australian Parliamentary Library, 2010). - Interest Rates The last two years were years that the world as a global entity was resurrecting from previous years of economic shock, meltdown, crisis or however it may e described to depict an undeserving situation. For this reason, it was very important that the policies by the reserve bank and government would be centered on the people and empowering them to be investment oriented. For this reason, the periods of 2009 and 2010 was one season that the reserve bank maintained most of its lending and interest rates. The reserve bank with consultation with the government also ensured that the interest rate was generally low and affordable for borrowers. In some cases, there were even downward cuts on the interest rates and reasons for these decisions included the need to boost the demand for credit to undertake investment projects as demand for credit rose just 0.6% (Rate Detective, 2011). Again, there was the need to conform to global trend such as China cutting its official interest rate by 1.08% (Rate Detective, 2011). Such a move was necessary to ensure that investors did not opt for countries with lower interest rates but for Australia. - Export Promotion Policy In times of economic recovery, exports have been identified to be more profitable to countries than imports (Koduah, 2008). This is because exports attract a lot of revenue in the form of taxation. Knowing this, the Australian government over the last two years was not blind on putting measures