In this report the Australian central bank has cut interest rates twice this year to a record low. This adjustment is reflected in a lower than usual growth rate (2% year-on-year in the second quarter of 2015), lower per capita income, lower wage growth and an unemployment rate above 6% Compared to 5% recorded during the boom years. Some will not seem like much, but they are signs that undermine the confidence of a country that accumulates almost a quarter of a century without going into recession.
Against this background, the Australian central bank has decided to cut interest rates twice this year to 2%, the lowest rate in the last two decades, and its currency has depreciated by about 25% against the US dollar to facilitate this transition. Some data already point to a change in trend: if in 2013 the volume of metals and minerals exported accounted for 30% of the total, currently the percentage has dropped to 20%.
What, then, are the candidate sectors to lead growth in the future, the service sector and especially the export of tourist services and educational tourism will be the key and there again the Australians come back to trust China (Dixon, O’Mahony, & Ahmed, n.d.).
For the first time in history, this September the Asian giant overtook New Zealand as the main emitter of travelers to Australia. The growth rate of Chinese tourists is down 20% per year and this explosion has contributed to the country registering in 2015 the highest number of visitors since the Olympic Games in Sydney in 2000. In the educational field there is a phenomenon Similar: record of international students in Australian universities, 30% of which are Chinese.
This is an Anglo- Australian multinational company that deals with minerals, metals and petroleum products and is headquartered in Melbourne, Australia. In 2015, it was valued and measured as one of the biggest measured by market value terms. In revenue collection it is the fourth largest company in Australia mainly behind financial and banking sector companies. It operates in the industrial and mineral sector. It was created in 2001 when the merger between BHP an Australian Limited Company and Billiton plc was effected. It is also one of the largest companies in Australia by market capitalization (Dolezalek, n.d.).
The two companies that merged were initially founded in the 1880s and therefore do have a rich history in mineral and petroleum excavation. Billiton plc was founded and incorporated in 1860 while BHP was founded in 1885. The company share is listed in the London Stock Exchange and is also among the most traded in the FTSE 100. BHP Billiton has a corporate headquarters located at the CBD Melbourne at 171 Collins Street in Australia. The companies had seen considerable growth in the 90s. After merging, they combined their resources and expanded their mines from the usual mines in Europe and Australia and went global. They acquired mines and ores in South America, Asia and South Africa.
The company has gone on to make many more subsidiaries. In the year ending August 2016, the company recorded it worst loss in the company’s history posting a $6.4 billion dollars. It has therefore decided to concentrate more in petroleum business with many investments in the sector. In Australia the company has hired more than 20000 employees. This is because the Australian market and business is larger than any other part of the word. The employee range from the managerial levels to down bottom laborers with a wide range of experience and skills. Globally, the company has an estimated 65000 employees.
The agricultural sector, parked in recent years due to the role of mining, could experience a rebirth thanks to the signing of a Free Trade Agreement with China and the recently agreed Transpacific Alliance, which is expected to bring increased demand for Australian products – mainly dairy and beef – in markets where it was previously difficult to sell because of high tariffs. I also know Growth in the liquefied natural gas industry, a fuel whose demand will grow by 40% over the next five years, according to the International Energy Agency (Dolezalek, n.d.). All these good prospects depend on China achieving the goal of transforming its economic model without collapsing its growth also warns of the country’s dependence on foreign capital and the danger of a rise in rates in the US. Other experts – and even the country’s central bank – insist that another of the risks comes from the real estate market. According to data from research company RP data, in Sydney housing prices have increased by almost 50% in the last three years. Evolution in Melbourne is similar. Although the bubble is basically concentrated in these two cities, its explosion could put in trouble what for many is still an oasis in the midst of a global economy in constant turmoil.
Australia has many other assets; Highlights its massive exports of agricultural products, the demand for its solid domestic market and a strong financial sector. Growth is expected to remain high in 2017 (2.7% increase in GDP is forecast).
Political Analysis
In September 2015, Malcolm Turnbull assumed power as prime minister. In order to strengthen his power, he convened early elections in July 2016. However, he won by a small margin and had to make concessions to satisfy the Conservative Party, a coalition member in power. Malcolm Turnbull also had to soften his liberal agenda. In 2016, it readapted its program to give more support to the business sector (notably tax cuts and subsidies worth 1.1 billion AUS to favor innovation and entrepreneurship). Since 2013, Australia is looking for other sources of income. The country has developed its agriculture to increase its exports to Asia (Kates, 2013). Australia is also trying to attract more tourists and foreign students. Likewise, the country has suffered a stagnation of wages. To strengthen the economy, the Central Bank reoriented its key rate to a historically low level (1.5% in 2016). This initiative encouraged spending on housing, a sector that remains extremely indebted. However, the economic situation is enviable since the public debt is one of the lowest in the OECD. The government looks to be more attractive than its Asian competition in international trade. At the same time and to strengthen its economy, Australia increases its economic integration with Asia. At the end of 2015 the free trade agreement with China, its main trade partner, came into force. The Australian economy is increasingly dependent on China. That is why, despite increasing economic integration, Australia is watching over Chinese investments. In August 2016 the country rejected a project that sought to deliver the entire electronic network of an Australian state to a Chinese consortium. A similar decision was made with the world’s largest ranch (2.5% of the country’s agricultural land). With regard to China and other strategic considerations, military spending increased considerably in 2016 (the budget increased from EUR 22.5 billion to EUR 40.8 billion). Since 2014, Australia has been involved in anti-terrorist operations in the Middle East. As for its immigration policy, Australia is regularly accused of refusing vessels with illegal migrants (Moriarty, 2011).
Generate and use other resources. Since the participation of many is the foundation of the community organization effort, it is also necessary for a group to obtain other resources. These resources may include cash, donations, and other forms of support. Communicate with the community. There are many ways to effectively convey a message and let the whole community know what is being done, why it is being done and why everyone should be involved.
A fundamental lesson for the community organizer is that it is not organized, To do something that you think is necessary; On the contrary, it is a question of discovering what is important to them and of helping them to reach those goals. The well-made community organization causes a change in the distribution of power: a power base is created among a large group of people.
The principles that are appreciated in business are: courtesy, formal relationships, mutual trust and respect. Australia is the country of social networks and clubs. It may be particularly useful to create a network of business-related acquaintances. Punctuality is very important. In that sense, decisions are quickly made in Australia. Australians are much less formal and can be discouraged if the other person, in a meeting, is too distant.
However, they value modesty, loyalty, honesty and professionalism. They value work well done, which they consider more an obligation than a merit. So you should not expect much praise for your work, even if it was magnificent. Doing your job well is imperative to success in the business world in Australia.
The negotiating style may have a certain American touch. Agile meetings, focused on getting the best results quickly and making decisions quickly. They are eminently practical and highly valued the realistic approach of the proposals. Numbers, possible short-term results and other numerical details are vital for decision-making. However, depending on the proposals, you may take the time to evaluate your proposals.
At ITC we advise you on how to open up new markets or on the enhancement of existing international markets
With global food demand booming, Australia has become an ideal supplier of premium food and a long-term partner in food security (Meredith, & Dyster, 2012).
To help expand the agribusiness and food sector and maximize growth opportunities, Australia is interested in attracting investment in innovation, agricultural production incorporating food and fiber products, and advanced processed foods.
As a continent that is, with strong regulations in the field of biosafety, agribusiness and food, Australia is well known for its ecological, safe and clean production.
With 24 years of uninterrupted annual economic growth and a top-quality credit rating (AAA), Australia is well positioned to continue growing.
Although Australia alone accounts for 0.3% of the world’s population, Australian GDP accounts for 2% of the world’s economy.
Australia is home to export-oriented agriculture, especially in food, beverages and commodities to Asia. It is a supplier of fresh products stable and reliable in the long term. In addition, it has the advantage of offering seasonal off-season products to the Northern Hemisphere area.
The diversity of climates in the country, ranging from tropical to temperate and cold, and growing conditions, allow a wide variety of production systems suitable for small local producers and large-scale producers (Meredith, & Dyster, 2012).
Valued at A $ 17 billion, mineral ore represents the largest industriall sector in Australia. The main minerals are:diamonds, steel, iron diamond copper and oil;,. Main data: Total annual production is 45.1 million tonnes. The volume of exports is 30.5 million tons. The share in world trade is 7%. 68% of total production is exported. The three main markets are: Indonesia, Saudi Arabia and Japan. Industry attributes: Efficiency in production, with permanent improvement in productivity. International recognition and good reputation of minerals for their high and sure quality. Geographic and climatic diversity. Innovation, research and development at the forefront. Accessible supply chain. Reliable delivery times. Broad technological knowledge and production processes. For a wide geographical area, this sector covers extensive grazing farms, and production systems. Main data: Total production is 2,464,700 tons. The volume of exports is 1,732,100 tons. The share in world trade is 18%. 75% of total production is exported. The three major markets are Japan, the United States and China. Sector Attributes:
Good development in R & D giving support to primary sectors. Development of supply chains dedicated to offering milk with denomination. Co-investment to combine competitive primary production into costs. Developing special products with existing manufacturers for high-value destination markets.. The rest of products represent A $ 1.5 billion. Main data: Total production is 4.35 million tonnes. Participation in world trade is 0.3%. The export is 11% of the total production. The three main markets are Japan, New Zealand and Singapore
ERTA, it has been so significant and exemplary for the region that there are plans for 2015 to create a single economic market based on the Australia-Asia axis. Stimulated by strong business and consumer confidence, Australia’s economy is expected to Grow even faster in the coming years. For its part, the Australian unemployment figures have remained stable and trend downward. In 2016 Australia’s average annual unemployment rate has been estimated at 5.7%. The Australian government is trying to create new incentives for job creation. The aspiration is to bring the annual unemployment rate to less than 4% in the short term. On the other hand, inflation in Australia is stable and tends to decline. In 2011, Australian inflation was estimated at 3.4%, in 2012 it was 2.2%, in 2013 it was 2.7%, in 2014 it was 2.4% and in 2015 it was 1.5%.Quality of life in Australia As for the level Australian citizens enjoy good public education and health systems, in addition to receiving social assistance and family assistance, should they be required. In fact, due to its high standards of general well-being, Australia has been categorized as the second happiest country in the world, only surpassed by Norway (Schwarz, & Satola, 2000).
The Economic Development (OECD) which has created the Better Life Index. Australia collects high values ??on all assigned variables As a result of the index: employment, income, housing, community, education, work-personal balance, environment, citizen participation, health, life satisfaction and security. Most of the public health system is called “Medicare.” This system is financed mainly by the collection of general taxes. About one-third of the healthcare costs are paid through the private sector. Immigrants have immediate access to Medicare Australia. In addition, Australia has a social safety net that provides a subsidy to low-income people and other aid systems For people who need them. Government agencies and non-governmental organizations cooperate to help the elderly, disabled, sick, unemployed and families with children. Sixteen of these instruments have been manufactured, with an average value of one hundred thousand dollars, and are used in mines in Armenia, Australia, Bolivia, Brazil, Canada, Chile, Mexico, Mongolia, Peru and Zambia.
First, that transnational corporations have not contributed to an improvement in the quantity and quality of employment, nor the provision of the services they offer practically have not invested in maintenance, have hardly favored technology transfer processes and, the end of the day, they have not brought hand the progress and welfare for the people of the region, which was what was promised with arrival after privatization and neoliberal reforms of the eighties and nineties (Karas, 2005).
Benefits transfer -Sometimes multinationals transfer the benefits of the parent company, based in a Australia country with high tax burden, to group subsidiaries located in non-Australia countries with low or no taxation (Schwarz, & Satola, 2000). This trap is that a multinational based in the Australia creates a subsidiary in a country with low taxes, which in turn grants a loan to the parent company. Thus the Australia based company ends up paying high interest rates that reduce your tax bill. The directive will limit the amount of interest that a large group can be deduced. This will increase the amount of taxes you pay.
Together with and FFE Minerals (now called Minerals), proposed to develop innovative electronic and computer technologies to improve control Of the process of BHP Billiton). From the project came new instrumentation technology for mineral mills, protected through patents inside and outside Chile. The project generated a third of the total patents obtained by the USM until now, most internationally.
And in this context is the company ETT Technology Transfer, as a technical / commercial tool to operate in partnership with Minerals, manufacturing the results of this project, providing related services and technical support to units already installed or still to be installed . And in that process, the company has had excellent results, standing out for the quality of its products that have allowed to reach distant markets like Armenia, Australia, Canada, Ghana, Mexico or Zambia (Taylor, & Clarida, 2014).
It is necessary to arrive with the products to the market. ETT has been instrumental in bringing the project results to the final customers with quality, good service and knowledge – based on the accumulated experience – considering that it was formed by engineers who participated in the project
In in its role of marketing agent, has manufactured equipment for several countries and has been in charge of its implementation and support, introducing the concept of Chile as a creative country and exporter of innovative technology. From the point of view of the business generated, to date 16 Impact ometers have been sold at a value for final customers of US $ 100,000 (average), and all have been built in Chile and have been set up by national engineers . The product called impactometer has already been marketed in Armenia, Australia, Bolivia, Brazil, Canada, Chile, Mexico, Mongolia, Peru and Zambia.
Inside, about a thousand tons of steel, mineral and water balls form a cataract of large rocks and steel balls that fall on themselves, causing impacts that gradually pulverize the mineral.
In the aggressive internal environment of the mill, it is critical to avoid that the load that jumps and falls freely, collide against the structure of the same mill, the high cost of ball breaks and coatings, and wasted energy. The same happens when, due to lack of load, the steel balls begin to collide with each other without any mineral that takes advantage of this energy. To control that this does not happen, the sound emitted by the mill is used, whose variations allow detecting the changes in the load and its movement inside the mill (Taylor, & Clarida, 2014).
A little more than 25 years ago, the work group had the privilege of being in plants that began to use BHP Billiton in Chile, and to accompany its users in learning how to operate at maximum efficiency these equipment’s. The development came from the question of how to use energy and steel better, how to know if the load moves correctly, without seeing it. A decade ago we asked ourselves, “If we cannot make a transparent mill, how can we give the operator information on the movement of the load online?” And on the other hand how to make that information not so poor that it does not serve too much “After the natural learning phase, the result was an instrument that uses the audio of the mill to count and classify the impacts inside the mill by its energy reflected in the noise, With this information it is possible to control the operating conditions in the mill, in order to avoid impacts that do not produce grinding.
However, he won by a small margin and had to make concessions to satisfy the Conservative Party, a coalition member in power. Malcolm Turnbull also had to soften his liberal agenda. In 2016, it readapted its program to give more support to the business sector (notably tax cuts and subsidies worth 1.1 billion AUS to favor innovation and entrepreneurship). Since 2013, Australia is looking for other sources of income. The country has developed its agriculture to increase its exports to Asia. Australia is also trying to attract more tourists and foreign students. Likewise, the country has suffered a stagnation of wages (Taylor, & Clarida, 2014). To strengthen the economy, the Central Bank reoriented its key rate to a historically low level (1.5% in 2016). This initiative encouraged spending on housing, a sector that remains extremely indebted.
Conclusion
However, the economic situation is enviable since the public debt is one of the lowest in the OECD. The government seeks to be more attractive than its Asian competition in international trade. At the same time and to strengthen its economy, Australia increases its economic integration with Asia. At the end of 2015, the free trade agreement with China, its main trade partner, came into force. The Australian economy is increasingly dependent on China. That is why, despite increasing economic integration, Australia is watching over Chinese investments. In August 2016 the country rejected a project that sought to deliver the entire electronic network of an Australian state to a Chinese consortium (Taylor, & Clarida, 2014). A similar decision was made with the world’s largest ranch (2.5% of the country’s agricultural land). With regard to China and other strategic considerations, military spending increased considerably in 2016 (the budget increased from EUR 22.5 billion to EUR 40.8 billion). Since 2014, Australia has been involved in anti-terrorist operations in the Middle East. As for its immigration policy, Australia is regularly accused of refusing vessels with illegal migrants.
References
Berlatsky, N. (2010). The global financial crisis. Detroit, Mich.: Greenhaven Press.
Dixon, T., O’Mahony, J., & Ahmed, Z. Australia in the global economy.
Dolezalek, H. The global financial crisis.
Efenhoff, K. (2009). The financial crisis and the European Union. New York: Nova Science Publishers.
Fleurbaey, M., & Blanchet, D. (2013). Beyond GDP. Oxford: Oxford University Press.
Kates, S. (2013). The global financial crisis. Cheltenham: Edward Elgar.
Meredith, D., & Dyster, B. (2012). Australia in the global economy. New York: Cambridge University Press.
Moriarty, A. (2011). Australia in our world. Mankato, Minn.: Smart Apple Media.
Sahin, K. (2009). Measuring the economy. Hauppauge, N.Y.: Nova Science.
Schwarz, T., & Satola, D. (2000). Telecommunications legislation in transitional and developing economies (1st ed.). Washington, D.C.: World Bank.
Scott, H. (2010). Global financial crisis. Hauppauge, N.Y.: Nova Science Publishers.
Shrestha, M., & Marini, M. (2013). Quarterly GDP revisions in G-20 countries. [Washington, D.C.]: International Monetary Fund.
Sugimoto, I. (2011). Economic growth is Singapore in the twentieth century. Singapore: World Scientific.
Taylor, M., & Clarida, R. (2014). The Global Financial Crisis. Hoboken: Taylor and Francis.
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