Australian Economic Policies Essay Research Paper Australian — страница 4

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million tonnes of wheat and also 200,000 speedboats. At this stage, both economies are operating in satisfaction to the local consumption. The total annual production of two countries stands at 8million tonnes of wheat and 400,000 speedboats. Table B shows that Australia has the greatest absolute advantage in the production of wheat and that New Zealand has the least disadvantage in the production of motor vehicles. If the principle of comparitive advantage is applied so that Australia concentrates its resources on production of wheat and New Zealand concentrates its resources on production of speedboats total annual output of the two nations will rise to 10million tonnes of wheat and 400,000 speedboats. In this case, gain from specialisation is in wheat production. Now Australia

can trade its surplus wheat, provided that 200,000 speed boats be reimbursed in return. Some of the goods and services Australia would have a comparative advantage in producing in the global economy would be agricultural commodities such as wool, coal, gold meat, aluminium, iron ore & concentrates, wheat, alumina, petroleum products, crude petroleum oils. For much of the period up to the 1960 s, we rode on the sheep s back. A term awarded to our economic position when we relied on export of wool as our main long term export. Figure 2.1 illustrates our current export situation, where we can observe that it has deteriorated to third place behind coal and ore. In recent years we have also seen a significant growth in services exports such as tourism, foreign students paying to

study in Australia, accountants, financial advisors, sports players, doctors and in a whole range of other exports. IN such a world, Australia has no choice but to accelerate our efforts to make our economy more competitive on international markets and be very careful not to alienate customers abroad by exercising of severe protection policies. Especially consumers who do not have to purchase their goods and services from Australia. As the 1996 OECD Economic Outlook document states, the most successful economies of the 90 s have been countries, which have reduced barriers to trade and reduced government regulation of their economies. In conclusion, it would be economic suicide for Australia to try to return to its turn-of-the-century Fortress Australia approach. If we do not

strive to achieve market of Free Trade, Australian economy will continue to come down with pneumonia every time a international economy sneezes.