Australia's Economic Condition: Challenges And Opportunities

Factors impacting economic planning in Australia

An overview of your selected problem from both an internal Australian viewpoint AND how the problem may be perceived by someone located overseas. How is the perspective likely to be different.

The economic condition and situation of Australia has been quite stable for more than 2 decades. This has resulted into an increase in the living standards for the people, which is an achievement. However, there are certain issues that can impact the stability of the economy. They are related to the factors that can directly or indirectly impact the economic planning of the country. As per the financial experts, the ratio of investment on many mining sectors has tremendously increased. This has contributed towards the economic development of the country. The investment in the mining sectors has increased from 2 per cent to 8 per cent of the GDP of the country. This has affected the capital stock of the mining industry. Such a boom has positively impacted the performance of the companies and the economic condition of the country. The boom has also increased the employment ratio for the people of the country. Recently it was observed that more than 180,000 staffs have been employed in this sector. This has increased the earnings ratio for the people of the country. Despite of such positive signs, the prices of many commodities had reached its peak in the year 2011, which had raised a concern for the authorities of the country. This was one of the reasons that the capital investment had passed its peak in the same year. The other reason that has contributed towards an increase in the economic condition is the increase in the production activities and export quantity of various products including fruits. This is one of the reasons; the experts of the country expect to face certain challenges that are related to transition of the above mentioned factors (Arnold, 2008).

In order to retain the success of the economic condition, it is quite imperative to introduce effective budget which will take care of the needs of the people and the country. This is also done to realise the short term economic realities that can directly impact the performance of the country. In order to achieve the set target, the federal authorities of the country have set forth an effective fiscal consolidation, which will handle the challenges that are involved in this process. It also includes on introducing the structural changes that would contribute towards building the fiscal resilience, which is considered to be essential for the development of the country. In this process, the support productivity is also analysed and the right steps are taken to handle the challenges that are involved in the process.

The prime objective of the government has been to improve upon the standards of living for the people. For this, it is essential to gather the support of the private sectors that would generate the enough employment opportunities for the people. This is required for improving upon the income growth for the people of the country. Rules are drafted to support the less advantaged people by providing the taxation policies (Arulampalam, Devereux, and Maffini 2009).

Efforts taken to maintain economic stability

One of the challenges that impact the economic development of the people is the tax burden, which has been heavily levied upon business houses and individuals. It is quite important to charge a fair amount from different entities. Apart from this, the funds collected from different sources have to be used in a fair manner. The challenges that impacts the budget formation and implementation are mentioned below –

1. Removal of the impediments, including disincentives like subsidies and others. Such charges impacts the performance of small and medium sized business houses and poor earning income grouped individuals.

2. Plans to invest wisely in the development of the infrastructure have to be done in an effective manner.This will help the authorities to save on the money and the time that is invested in the process.

3. Effective plans needs to be implemented for reducing the expenses or costs that are involved in the performance of the government. Through such a method, it is possible to increase the efficiency of the government which is a must for improving the performance of the country.

4. Through the budgeting method, an attempt has to be made to improve upon the funding system, which is considered to be essential for implementing changes in the state plan. This also includes providing groundwork for analysing the future needs that will cater the expectations of the people and the country.In this process, the authorities attempt to introduce an effective system through which the responsibilities and the roles can be improved. This is quite important for the successful implications of the rules for the economic development (Auerbach, 2010).

Opportunities for bringing in the changes

The challenges related to underpinning of the budget session have to be sorted out in the right manner. Such factors can help in improving the performance of the country. Apart from this, the challenges associated with the productivity can be also overpowered. Such steps need to be handled in an effective manner, as this will help in improving the productivity for the country and the people. The government has an opportunity to handle the issues that are related to flexibility, efficiency and other factors that are related to the steps that has to be followed for improvement in the market. The steps that are intended to be followed have to be analysed by the competition policy review committee. This would help in bringing in the changes that will contribute towards the economic development of the nation. In this method, the authorities also work towards improving the law and providing fair opportunities to the members. Through such process, the authorities attempt to work towards realising the opportunities and working towards the policy settings (Australian Bureau of Statistics (ABS) 2000).

How is such change viewed by foreign nations?

The countries that are allied with Australia vouch positively on the economic development and stability of the nation. Due to consistence in performance, the nation has better perspective towards the nation and this is considered to be the positive sign.

Challenges affecting the budget formation and implementation

The economic development of the country majorly depends upon the reform programs that have been undertaken by the authorities of the country. This includes implementing changes in tax policies, introducing white papers, and others that would contribute towards the economic development of the country. The changes have to be implemented so that fair opportunities are provided to the people, which are considered to be necessary for the economic development. The plan for changes has been communicated with the members, and the changes have been planned to be introduced by the federal authorities by 2015. Such changes have been proposed to be introduced, after analysing the challenges that are involved in the process. In this process, the tax system has to be changed as currently it has been overstated. This is done to place the public finances in the right manner, so that the changes in the reform program can be introduced by the authorities. Also, the process that needs to be followed for levying direct and indirect taxes has to be planned. This will help the authorities to collect the taxes and use them in the best possible manner. Funds collected from different taxation methods have to be used for implementing changes in the reform programs. This will help in implementing the changes that is required for sharing of the revenue and other factors that will contribute towards the successful business operations. The revenue has to be increased as the funds can be used for introducing the reform programs that will stabilise the economic development (ACMA, 2009).

Economic development for the country is quite an important factor and cannot be overlooked by the government. In order to introduce the changes, it is essential to analyse the changes that would be required for improving the economic development of the nation. In this process, it is essential to analyse the current tax collection process and implement the best possible step through which the funds can be used in the right manner. Apart from this, the changes in terms of reform program and others have to be analysed, as this will help the authorities to introduce the changes that will benefit the people and the nation. The taxation procedure has to be transparent as this will help in collecting the funds and using them in the right manner. besides this, the steps that are intended to be followed by the nation has to be communicated with different authorities, as this will help in implementing the changes that is required for planning the development of the nation. Some of the steps that needs to be followed in this process includes –

• Introducing the best plan for reform changes
• Analysing the challenges that are included in the process of introducing the changes involved in the method (AER, 2008).
• Implementing changes through which the investments of the infrastructure can be improved.
• Introducing effective steps for collecting taxes that would benefit the nation.

The stakeholders are –

1. The federal authorities
2. People of the country
3. International traders who carry out the business with the nations
4. Taxation departments.

The issues associated with the infrastructure and investment needs to be planned and implemented in the right manner. This will help in analysing the challenges and implementing the right steps through which the changes can be introduced (ANAO, 2008).

The current issue is with the process that has been adopted by the management to improve upon the below mentioned factors –

1. Improving on the policies that are associated with the taxation process
2. Introducing better methods for improving the infrastructure and other factors that are necessary for the development of the nation
3. Improving upon the trade relationship with the neighbour countries

The federal authorities have attempted to take the right steps through which the changes could be introduced for introducing changes. However, in this process the challenges has to be analysed, and the corrective steps has to be communicated with the members. This will help in increasing the quality of communication, which is necessary for introducing the changes. There are reform programs introduced by the federal authorities. The same has been done with an intention of introducing the changes that will benefit the country (AFTS, 2008).

The issues faced by the nation have to be communicated with different departments and authorities. This has been done with an intention of introducing the plans that will benefit the country and the people. The need for renewable energy has increased, due to industrialization. The needs have to be thus taken care of, and handled in the right manner. Communication in this process has to be effective and simple, as the rules associated with the changes and other factors can be interacted with the members in the right manner (Ayyagari et al., 2009).

References

Arnold J, 2008. Do tax structures affect aggregate economic growth?: Empirical evidence from a panel of OECD countries, Working Paper no. 643, OECD Economics Department.

Arulampalam, Devereux, and Maffini 2009. The direct incidence of corporate income tax on wages, Working Paper 09/17, Oxford University Centre for Business Taxation, Oxford.

Auerbach A. 2010. ‘Directions in tax and transfer theory’, paper prepared for Australia’s Future Tax System Review, Tax and Transfer Policy Conference, Melbourne.

Australian Bureau of Statistics (ABS) 2000. Australian national accounts: Concepts, sources and methods, cat. no. 5216.0, ABS, Canberra.

Australian Communications and Media Authority (ACMA) 2009. Annual Report 2008–09, ACMA, Melbourne.

Australian Energy Regulator (AER) 2008. Review of the weighted average cost of capital (WACC) parameters for electricity transmission and distribution, issues paper, AER.

Australian Government Information Management Office (AGIMO) 2008. Interacting with government: Australians’ use and satisfaction with e-government services, AGIMO, Canberra.

Australian National Audit Office ANAO, 2008. Audit Report no. 32: Preparation of the tax expenditures statement, Australian Government, Canberra.

Australia’s Future Tax System (AFTS) 2008. Architecture of Australia’s tax and transfer system, Treasury, Canberra

Ayyagari P, Deb P, Fletcher J, Gallo B, and Sindelar J, 2009, Sin taxes: Do heterogeneous responses undercut their value?, NBER Working Paper no. w1512z.

Bedi J, Richards A & Tennant P, 2003. The characteristics and trading behaviour of dual-listed companies, Research Discussion Paper 2003–06, RBA.

Bernheim B & Rangel A, 2004. ‘Addiction and cue-triggered decision processes’, American Economic Review, vol. 94, no. 5, pp. 1558–1590.

Bovenberg L & Goulder L, 2002, ‘Environmental taxation and regulation in a second-best setting’, in Auerbach, A & Feldstein, M (eds), Handbook of Public Economics, third edition, New York, North Holland.

Perth C, 2014. Challenges and opportunities for Australia over the next decade. Viewed on 26^th January 2015. Retrieved.

Report to the treasurer, 2009. Australia’s future tax system. Viewed on 26^th January 2015. Retrieved.