WELCOMEPresentation by:

Gagan

ECONOMY DOMINATED BYService sector – 68% of GDPMining sector – 10% of GDPTotal mining sector 19% of GDPMining sector and agricultural sector – 12% of GDPPer capita GDP Australia is ranked 12th and 17th (ppp) in the world acc. To IMF.ECONOMY OF AUSTRALIALargest country of the world.GDP US$1.525 trillion (2014)Total wealth 6.4 trillion dollar.Acc. to forecast of Reserve bank of Australia , its the 19th largest import and export country.

Due to the rise in commodity price, Australia puts emphasis on export commodities rather than manufactures, which has a significant change in terms of Australian trade.Australia has 3%, 5% of total GDP in agriculture and natural resource.

Australia avoid a series of crisis without a recessionAs the commodity boom has come to an end, the Australian economy has slowed down but has not gone into a recession. as the global financial crisis hit and tax revenues fell, Australia introduced a series of stimulus measures to tackle the crisis that moved the economy from a budget surplus to budget deficits.

On important macroeconomic indicators, including GDP, unemployment, inflation, Current Account Balances, and debt.

Australia has managed to go through the crisis with negligible inflation because of current account deficits (CAD) for more than a hundred years, except for very brief spells of a surplus. However, since the GFC, only Germany and Italy have had lower CADs.At the same time it also abolish mining tax and the carbon tax.The Australian economy has strong growth due to several mining booms and strong demand from trading partner like china.

5 FACTORS RELATED TO HEALTH OF AUSTRALIA’S ECONOMY

• BOTH REAL AND NOMINAL GROWTH IS STRONG Real GDP in trend grew 0.8% in march quarter and 3.2

annually Nominal GDP rose 5% in past year(2012) and the budget

was predicting growth of 4%.• THE EXPORT IS BOOM The growth of goods and services is 10.4% in 2012 which

was the strongest growth more than a decade.• MINING IS STILL KING The mining sector contributed 1.1% points towards annual

growth. Finance and insurance industries contribute 0.6% point

contributions

• THE NEW KING IS NOT THE SAME AS OLD KING Mining boom will not bring boom in employment• WORKERS ARE PRODUCTIVE Over past 5 years labor productivity in market sector has

grown 12.9% The turnaround period was2005 to 2009 when it grew just

4.9%TRENDS THAT WILL DETERMINE AUSTRALIA’S ECONOMY• According to a banking industry study by management

consultancy A.T. Kearney, these trends pose both opportunities and threats to the country’s economic success.

THE AGEING POPULATION

• Australia’s The population is expected to continue to grow but the relative share of the population which is of working age – the labour force — is expected to shrink.

• This means, over time, a smaller group of workers will be supporting a larger group of retirees. population is not only growing, it is also getting older.

• While becoming older, Australians have also become richer with average net worth rising more than 40 percent from $0.5 million to $0.7 million in the past 10 years.

• Australians are also accumulating funds at a faster rate with a net saving rate of 11% of disposable income.

POPULATION GRAPH

EMERGING ASIA

• The rapid increase in income and the expanding population in Asia are big themes in the global economy, and they will have a big effect on Australia.

• GDP growth for developing Asia is expected to be around 6.8% for 2014 and 2015 versus 2.2% for advanced economies.

• Australia’s economy is connected with Asia on three important dimensions: trade, capital, and people.

• Trade grew with an average of 18% per year, rising from U$46 billion in 2002 to $250 billion in 2012.

Opportunities for the Australian economy include1. Increased efficiencies through use of technology, improve

productivity and simplicity in business transactions2. Maximize customer value3. In an optimistic scenario, Foreign players will enter the

Australian marketplace but will nurture a healthy competitive environment across all sectors. Growth of local businesses slows down or declines as a result of increased foreign competition from companies riding the digital tsunami unencumbered by the requirements of brick-and-mortar businesses.

4. In an pessimistic scenario, Growth of local businesses slows down or declines as a result of increased foreign competition from companies riding the digital tsunami unencumbered by the requirements of brick-and-mortar businesses.

MINING MANUFACTURINGAGRICULTURETOURISMMEDIAEDUCATIONENERGY

INDUSTRY

1. Established strong relationship with china and India

2. Advancing in technology and increasing urbanization

3. Developed economy due to education, technology savvy

workforce

4. Competitiveness of Australian companies depend on adapting the

needs of customers.

5. The growth in consumption in the Asia-Pacific region offers huge

opportunities to Australian companies.

LATEST TRADES OF BUSINESS ENVIRONMENT

Australian Government launches Industry Innovation and Competitiveness Agenda

The Australian Government has released the Industry Innovation and Competitiveness Agenda (Agenda) to strengthen Australia’s competitiveness.

The Agenda is a key to business-focused element of the Government’s Economic Action Strategy and provides a framework for boosting Australian industries competitiveness and driving greater innovation and investment across Australia.

A. Lower costB. Business friendly environment with less regulation,C. Lower taxes and more competitive marketsD. A more skilled labour forceE. Better economic infrastructureF. Industry policy that fosters innovation and entrepreneurship.

The Government has four key ambitions as part of this agenda including:

Major new reforms announced in the Agenda include:initiatives to encourage employee share ownershipestablishing Industry Growth Centersreforming the vocational education and training sectoraccepting international standards and risk assessments for certain product approvals

The Australian Bureau of Statistics(ABS)Unemployment rises to

6.4%;Highest for last 13 years.

Last worst recorded in 2002, jobs fell by 12,200 to 11669 million.

(RBA)Annual growth rate of 1.6% matches 1.8% Growth in working

age population.

The big jump in the unemployment rate have been deeply concerning.

High unemployment is one of the biggest social and economic

challenge.

UNEMPLOYMENT

EXPORT IMPORT BUSINESS OF AUSTRALIA

Australia was ranked 19th for both imports and exports in the world in 2010. As a member of numerous organisations such as APEC, the G20, WTO and OECD, Australia has multiple free trade agreements with numerous countries such as the US, Singapore,

Chile and Thailand. Primary imports - commodities: machinery and transport

equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products.

Primary imports partners: China (17.94 percent), US (11.26 percent), Japan (8.36 percent), Thailand (5.81 percent), Singapore (5.54 percent), Germany (5.3 percent) 

Primary exports - commodities: coal, iron ore, gold, meat, wool, alumina, wheat, machinery and transport equipment.

Primary exports partners: China (21.81 percent), Japan (19.19 percent), South Korea (7.88 percent), India (7.51 percent), US (4.95 percent), UK (4.37 percent), NZ (4.1 percent).

Exports in Australia increased to 27243 AUD Million in December of 2014 from 26869 AUD Million in November of 2014.

Imports in Australia decreased to 27680 AUD Million in December of 2014 from 27886 AUD Million in November of 2014.

Australian export and import: Australia has strong trade ties with the rest of the world. Its location has also allowed Australia to become a major supplier to markets in the Asia-Pacific region.

Historically, from 1959 to 2012, the Australian GDP growth rate average at 2.9%, achieving an all time high of 4.5% in March, 1976. To continue GDP growth, Australia must invest in capital goods.Australia’s businesses use advanced technology to make their companies work more efficiently. If a company does not keep its machinery up-to-date, other companies will be able to produce similar goods for a better price. Australia is a world leader in entrepreneurship. Australia is no. One (1) in twelve (12) adults owns his own business. It is one of the most important factor to keep economy moving & provide jobs for workers. During the last global financial crisis in 2007 most of the countries such as US, and European countries were sufferings in recession, but Australian government control the situation by implementing strategies that helped small businesses and individuals and kept the economy stable

RECOMANDATIONS

Mining sector has played an important part in protecting Australia from effects of global economic crisis.Now Australia seem to be International Education Hub attracting resident as well as foreign Students, That can be target consumers of exports of goods and services.An effective measure to boost participation is to increase the preservation age, the age at which Australian can access their superannuation savings, to increase retirement savings and reduce Age Pension reliance. Federal Government is too aggressive in tightening budget spending, rather than relying on stronger economic growth to boost government revenues and thus reduce the size of the budget deficit.

Strengthening the policy environment to foster rebalancingMaintaining macroeconomic stability with appropriate fiscal and monetary policies.Maintaining macroeconomic stability with appropriate fiscal and monetary policiesRebalance tax burden from income to consumption (in particular, the goods and services tax) Address federal-state shared responsibilities to improve efficiency Reinforce the Emission Reduction Fund programme with a safeguard mechanism that prevents offsetting emission increases

THANK YOU