The landmark Australia–China Free Trade Agreement (ChAFTA), signed sealed and delivered, completes a trifecta of trade deals since last year with Australia’s three Northeast Asian neighbours — China, Japan, and South Korea.
Talk of the demise of Australian coal production is largely political, not economic.
The problem for the countries that presently mine and burn coal is that there are currently few low cost alternatives. Most countries in the world today are focused on trying to ensure their citizens have access to electrical power. This is difficult without low cost base load electricity production and at present, coal provides an affordable solution.
Once you start picking away at something, it can be hard to stop. Australia’s foreign investment regime is a case in point: successive free trade negotiations have seen welcome liberalisation, but only for selected countries. And without a clear guiding strategy, this piecemeal approach threatens to turn the regulatory regime into a mess that is difficult to navigate and discourages foreign investment.
With the huge structural adjustment that the Australian economy has to effect as the commodities’ boom fades into the distant past, the ability of Australia to attract high levels of foreign investment has never been more critically important to driving employment, productivity growth, and innovation.
Australia saw GDP growth accelerated to a 0.9% rise in the first quarter of 2015, above expectations, although incomes have stagnated and economists fear the country is facing a disinflationary trend that is unfamiliar to the country.
As Australia moves away from a decade of resource-driven prosperity, it is even more important that it avoid mistakes that previously might have been papered over by the boom times. Yet there are loud voices calling for the mistakes of the past to be made again. One of the loudest is that of Australian mining company Fortescue’s non-executive chairman, Andrew ‘Twiggy’ Forrest.
Australian federal government policymakers need to have broader and more robust consultations with business, consumers and state governments when it comes to trade treaties. As an open economy that is heavily dependent on trade for its well-being, it is important for Australia to get trade and economic integration right.
Economic modelling and its associated forecasts are always open to criticism, particularly when the results align with the predisposition of the modellers or their paymasters. Such criticism has been a feature of economic modelling on energy and climate change for several years.
When it comes to climate change and Australia’s economic future, different crystal balls can produce vastly different results.
In the lead-up to the federal budget the government has made it clear, it sees the long-term task of fiscal management in terms of cutting expenditure rather than raising revenue.
We have been repeatedly told the Rudd-Gillard government let spending get out of control and that we must now rein in outlays and “repair” the budget to avoid a Mediterranean-scale disaster.
Digital disruption is a phrase increasingly bandied about when it comes to the Australian economy, but how deeply do digital technologies really penetrate our industry.
