Friday, January 20, 2012


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Government Policy

• Promote free trade

• Deregulate the labour market

• Deregulate the financial market

Cheap Custom Essays on John

• Improve efficiency in Government

• Reform of Government taxation

• Schemes to promote exports

• International trade agreements that promote exports

Goal of External Stability

The goal of external stability is for Australia to pay its way in external ‘international’ transaction.

• Net Foreign Trade � less than 6% of GDP

• Current deficit no more than % of GDP

• Stable exchange rate

Government Policies

Cutting tariffs and other forms of protection

• Decreases the cost of imported parts and materials, leading to cheaper Australian goods, leading to overseas contracts.

• Increase imports, leading to Australian companies to be more efficient, leading to getting overseas contracts themselves.

Increasing the use of productivity-based enterprise bargaining to set wages

• Increase wages for productivity, which leads to an increase in productivity and an increase in GDP. The increase in wages for productivity leads to cheaper goods, leading to an increase in competitiveness, leading to an increase in exports.

Encouraging local savings and superannuation

• Decrease spending which leads to a decrease in imports. Decrease in purchases and decrease in prices, leading to and increase in competitiveness and an increase in exports.

• Increase in savings, leading to us not needing to borrow from overseas to fund our GDP, leading to a decrease on interest on foreign load, leading to decrease in CAD.

Signing free trade agreements with other members of APEC

• This leads to our imports and exports being cheaper, because we want to increase exports, we are more confident and better off than other. This leads to a decrease in the CAD.

Encouraging investment in new plant and equipment as well as R&D (tax incentive)

• Leads to purchasing new equipment, leading to an increase in efficiency, leading to a decrease in operating costs, making more competition and increasing exports and an increase in the CAD.

Cutting company tax from 6% to 0%

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