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Analytical essay: The effect of changing economic circumstances on Australia from 1945 to the 1990s Example

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  • Document type:
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    High School
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The effect of changing economic circumstances on Australia from 1945 to the 1990s1

Analytical essay: The effect of changing economic circumstances on Australia from 1945 to the 1990s

Changing economic circumstances have affected Australia in the period 1945 to the 1990s. The country experienced tremendous economic growth and increased average incomes in this period leading to the long boom and rendered.
Increased immigration, need for economic growth, suburban contentment, mass consumption, planning, baby booming, and the either populate or perish ideology were inevitable responses to the war trauma and dislocation.

Analytical essay: The effect of changing economic circumstances on Australia from 1945 to the 1990s

Introduction

This paper seeks to analyse the effect of the changing economic circumstances in Australia as a nation from 1945 to the 1990s. The analysis takes into account the nature and causes of the economic change, political and social responses to the change, degree of support or opposition to the changing economic circumstances, and the extent to which Australia has been affected by these changes. Analytically, the essay discusses the prices and incomes accord in length, the cost push inflation emergence, inflationary expectations, the Australian labour market rigidity, economic development of new and expanded industries, and Protectionism.

The Australian economic performance increased during the post-war reconstruction period that was especially driven by industrial as opposed to Agricultural production (Fairbrother, 2002). The economic circumstances during Australian post war were caused and characterized by low unemployment which remained under 2 percent for a better part of the 1950s. Massive immigration, inflated commodity price, great domestic spending, stable and conservative government, and economic policy that incorporated the Keynesian principles are other features of the period (Robertson, 2008).

The most outstanding political response was the formation and ultimate win of the Liberal Menzies government in 1949 elections which formed stable and conservative rule (Fairbrother, 2002). The Menzies government won the elections on the basis that rationing and accolades of post-WWII reconstruction will be removed, and hence promoted the emerging boom. Keynesian principles in the economic policy also maintained a prominent government role in the economy. Hawke’s government floated the Australian dollar and also allowed foreign banks to operate in the country and private companies to compete with public ones.

The rise of the Australian consumer society caused by increased immigration into the country post WWII was a major social response. The period witnessed increased household spending as the growing portion of expenditure was being devoted to the purchase of capital assets. The domestic market increased and the Australian workforce skills also expanded from the massive immigration. Government also expanded services on education, health, and welfare services (Fairbrother, 2002).

The long boom was supported and sustained by a new consumerist desire as well as driven by industrial production, new transport modes, and industrial organizations (Robertson, 2008). The increasing general influence fuelled the process as manufacturing industries were favoured against agriculture.

Australia has been shaped by the economic circumstances in many ways. These include increased population, growth of suburbs, increased crime rates, higher rate of women entering the workforce, and high unemployment rates (Robertson, 2008).

The prices and incomes accord

The price and incomes accord was set as an agreement between the Hawke’s government and the workers’ unions on wages and jobs at a time that Australia was experiencing high inflation, unemployment rates, and national debt from the post-war reconstruction boom (Fairbrother, 2002).

The accord was set to limit the excessive wage rises. The wages would be controlled by the IRC as the government seeks to improve employees’ working conditions and create policies that would create more jobs and improve profitability of Australian industries (Fairbrother, 2002).

The government hiked spending in the public sector in order to create jobs for the unemployed. The Australian dollar was floated making it more competitive worldwide and hence the dollar’s value was controlled by the international market rather than government (Robertson, 2008).

The ultimate consequence of the economic boom just after the WWII was inflation. Although the accord helped to achieve government’s confidence in the economic sectors during Hawke’s rule, it lost support with unions. The government was seen to rigidly lean on the right wing policies to shape the labour market (Fairbrother, 2002).

Some indirect taxes were increased while policies to reduce tax evasion were introduced. The accord’s aim was to overcome foreign debts and unemployment (Fairbrother, 2002).

Large economic projects were adopted that introduced new industries as well as expanded the existing ones. These include Ord River Scheme and Mt. Newman, and the Snowy Mountain Scheme (Fairbrother, 2002).

The conservative government utilized formal protectionist and natural protectionist policies to sustain favourable economic circumstances. The policies describe the tariffs that are placed upon the competing foreign goods and services.

Conclusion

The post-WWII was a period of reconstruction to Australia. An economic boom was experienced from increased consumer spending during the time. Manufacture replaced Agriculture as the major economic activity. A stable and conservative government enhanced economic activities. Immigration also increased supplying labour and consumer market. However, the result of the economic boom was inflation and increase in social problems. The price and income accord was therefore set to reduce inflation, unemployment rates and minimize the national budget. Nevertheless, the method saw the reduced power of worker’s unions and gain of control of the industrial sectors. Australia also experienced the economic recession that struck the entire global market.

Reference:

Fairbrother, P. (2002). Privatisation, globalisation, and labour: Studies from Australia. Mel: Federation Press

Robertson, P. (2008). Resource based or resource cursed: A brief history of the Australian economy since 1901. AIRC Working Paper, 108, 1-28