Aussies Facing Economic Downturn- Better Economic Reforms Required?
Aussies didn’t have to face the troublesome recession for the last 24 years. They are financially rich with good credit scores. The estimated GDP rate has also geared up by 4.7 percent in 20125. However, recently Australian economy goes downward.
Economic Deficit in Australia
Recently statistic reports have identified the downturn tendency in the appreciation value of Australian dollars comparing to USD. Australian currency tumbles down below American 62 cents.
In previous week, Australian dollar reduced US2 cents in value. Reasons for underlying/embedded financial downturn in Australia should be surfaced to evaluate the overall economic growth of this country. The downfall in the investment process became prominent in 1999-2000. Within these financial years, the decrease in the investment took place in machinery, equipment manufacturing and factories. The abrupt fall in the field of mining made a nosedive going below 19.4 percent.
$A1.38 billion deficit is a bad notion to Aussies. Recession in consumerism and services was also hit by an $870 million deficit in last December of 2015.
Nosedive in Exporting Business
Australian Bureau of Statistics reports published also tracked the major 5 percent nosedive in product exportation business. The reduction in the product exporting happened abruptly. Richard Yetsenga, a famous economist, has explained in his survey report that the overseas product exportation to Europe and Asia passes through the depression or crunch. In the previous year, the trend to export Australian products to Europe was appreciably higher.
This year is not comfortable to Austrian exporters due to recession. On the other hand, due to the over-expenditure in domestic products, there is a steadfast rise of 4 percent in product importing. Nigel, one of the best economists for Westpac, has hinted at the acceleration of the pecuniary strength of the domestic market due to the increase in the products importation. In this connection, Australian Reserve Bank confirmed the rise in the credit scores to touch the recorded $64.5 billion as estimated in January.
Rise in Foreign Debt
In Australia, people applied for housing loans to buy new apartments. So, housing credit ratings bobbed up with a rise by almost 12.5 percent to estimated $218.5 billion within a span of 12 months covering the month of January. The percentage of business loans also went up by 9.7 percent with the estimation of $289.3 billion. Statistic reports released by the Australian government also tracked the nine percent rise in the foreign debt. It was an $8 billion deficit recorded in December last year.
Few Factors to Affect Australian Economy
In domestic market, retail sales dramatically soared up by 5.2 percent in last January.
At the same time, economists eye-witnessed a prominent 8.1 percent decrease in house building approval. Registration for ownership of new vehicle made a drop by 3.4 percent in January. It was a weak 1.9 percent drop in December. Bridge-Commodity Research Bureau has done meticulous finding to gather extrapolated facts to assess the economic situation of Australia. The index of Bridge Commodity Bureau showcases the downturn trend in prices of international commodities.
In past 24 years, prices of international commodities have not gone far below to affect the economy of Australia as it happened this year. It is the most risky situation for Australian economy to survive.
Over a 40 percent decrease in the prices of global products has hampered the economic development of Australia. There are other reasons of the price downfall in Australian market. For instance, political stagnation in Russia, recession in Japan and the crisis in European market tilted the economic infrastructure of Australia.
Jihad or Religious Profiling Not Supported in Australia. Sharia Law Criticized by Aussies
Shia Sunni issue in Australia will not be nurtured by the higher authority. John Howard (former Australian prime minister) and Peter Costello, the Treasurer, have sharply commented in commanding voice about Sharia law in the Australian society. Islamic people living in democratic Australia must not turbo-charge racial segregation, violence and jihadism to bifurcate law.
There is no place for Islamic citizens who follow Sharia Law claiming autonomous status to practice their religious formalities in Australia. They should live in the democratic environment.
Australiais not a theocratic nation to enhance the religious tension. In Sharia law, women liberty has been extremely minimized by bottlenecking their rights. They are not given the child custody in case they are remarried.Men and women in Australia are equal in getting education, building up careers and choosing life partners. All ethnic communities and people coming from Islamic nations must follow general laws which are applicable to all without bifurcation.Terrorism in Australia will not be accelerated.
The government of Australia is liberaland less religious intolerant.People are equal andindependent to take decisions.Any religious blasphemy and sentimental issue regarding the partiality in supportingprinciples of specific religious sects/ communities must not be tolerated by Australian government.
To be frank, Australiantrading relation with Gulf nations including GCC members can take cumbersome shape damaging growth of economy in Australia.
GCC are strong nations which havetie-ups with Australia in overseas trading. Decision against Sharia law may make a gap between Australia and other Islamic states to go for long term trading.
New Economic Reforms Needed
Sound economic reforms need to be finalized by the new government of Australia to overpower the deficit. Garnaut and Max Cordon, international economists, have given different prescriptions to refurbish the domestic economy of Australia. This country needs to monitor the new rebalancing theory of China to reset the economy by rescuing the nation from recession. Australian investment will have to be extended to other non-mining sectors and services to bring a handsome economic diversification for rapid economic stability.
Peter Costello, a reputed treasurer, has recommended the tax reduction by 30 percent to enable commercial agencies and organizations to boost up their business.
At the same time, experts opt for the removal of subsidies from various sectors to stabilize the situation.
Lastly, major corporate sectors, entrepreneurs and top officials in Australian government are unanimous to support the minimization of expenditure in working community. Regarding the deficit in the updated Australian account requires Australian government to reduce expenditure. The plunge in the face value of Australian dollar occurred in 1986 creating short-lived economic crisis. Keating predicted in 1986 that Australian government would be unstable (banana republic) owning to weakness in the financial structure of the country. Costello will be a miser with determination to control federal expense by cutting over- expenditure rates.