Australia in News

Australian budget gap this financial year to reach Aus$47 billion

The government of Australia published the first economic report in December after winning the election three months before， saying that the budget gap of this financial year might reach Aus$47 billion.

The budget gap accounts for 3.0% of Australias GDP. Before the election， the Ministry of Treasury of Australia forecasted the gap to be around Aus$30.1 billion. The figure of this time was 50% higher than that estimation.

Australias Minister of Treasury John Hockey made a pessimistic description of the economic outlook of Australia， since this country known for its vast resource is undergoing the cooled mining industry that has been driving the economic development of Australia for years. According to a report， Australia could not return to budget surplus in ten years. The media figure expected by economists is that Australia cannot restore the budget surplus until the 2018 financial year as reported by The Wall Street Journal.

Hockey said what he wanted to stress is that no challenge cannot be overcome. The tiny spending cut in different sectors can do nothing to bring the budget surplus back. What Australia needs is a complete structural change to the expenditure.

As Hockey forecasted， in this financial year ending June 30， 2014， the GDP growth rate of Australia is to be 2.5%， almost the same with the figure announced by the Ministry of Treasury before the election. But it is still much slower than the 4% growth rate in the previous financial year.

The heat of resources that has been lasting 10 years finally cooled down， bringing impact to the Australian economy. The drop in the price of bulk commodities forced the mining enterprises to cut jobs and close mines. The economic growth of Australia is expected to have fast decrease compared with the last financial season.

The unemployment rate of Australia could have climbed to 6.0% by the middle of 2014， slightly better than the 6.25% figure forecasted before the election. As the global economic recovery is looming， the commercial and consumer industry in Australia is going to recover as well.

In November 2013， the unemployment rate in Australia rose to 5.8%， very close to the peak after the financial crisis. This raised a problem for Tony Abbott， who became the new premier in September 2013. During the election， he promised to boost the slowed Australian economy quickly and create more jobs through tax reduction and new infrastructure projects.endprint

The Australian government did not reveal the detailed measures it will take to cut the spending.

It is expected that the proportion of Australian governments net debts in its economic output is going to reach 26% – the peak value in the history –in the 2023 financial year. But it is still far behind the international level since most developed economies have their net debts account for 90% of their economic output. But the electors of Australia began to show their concerns about the debt in September before the election. Some of them thought that the taxpayers money was wasted on building new assembly halls and libraries in schools by the Labor Party government during the financial crisis.

Labor Party government promised to restore the budget surplus in the middle term of 2013 financial year but failed to realize the promise. The greatly impaired the creditability of the Labor Party， leading to its loss in the election after six years governance. More generous Australian tourists in China

Australia has become one of the biggest sources of tourists for China. And Australians are very generous and willing to spend their money in Australia.

The data from Chinas State Administration of Tourism showed that 770 thousand Australians came to China in 2012， 6.7% more than that of 2011. They contributed US$1 billion to Chinese economy. Half of them are tourists； 18% took business travels and 26% came to China to work or visit their families.

Zhao Guangchao， a director at the Beijing tourism administrative department， said that the number of tourists from the U.S. went up 0.1% in 2012， the British tourists increased by 3.8% and the German tourists increased by 3.5%. Compared with other economies in the world， Australia is the fastest growing source for Chinas tourism industry.

In addition， Australia is very attractive for Chinese tourists. Now China is second largest source of tourists for Australia， only next to New Zealand. In the first ten months of 2013， there were 719.2 thousand Chinese going to Australia， up 17.3% year on year. They contributed US$4.5 billion to the Australian economy.

What made Australian economists come to China so massively， apart from Great Wall and Terra-Cotta Warriors？

Marcus Rubenstein， a reviewer of China issues， said that China was geographically close to Australia. There are more and more flights between Australia and China. He said： “Every day， the major airlines in China will have direct flights from Sydney and Melbourne to the major cities of China. In addition， the Australians make use of cheap air tickets of the flights to China and make the country as a stopover for their trips to Europe.”endprint

Australian auto industry faces death

The auto-making industry is a pillar industry for a country， especially a developed country. But the auto industry of Australia is now facing its end.

On December 10， General Motors announced the stop of producing assembled cars and engines in Australia and turned all its branches in this country into sales companies. GM also plans to stop all manufacturing activities in Australia.

Dan Akerson， former CEO of GM listed the “sins” of Australian auto market： the continuous strong Australian dollars， the high manufacturing cost， the limited domestic demand and the likely most scattered and competitive market in the world.

GM now produces the local brand Holden in Australia. But its three plants rely on the governmental subsidies for operation. Once GM quits， the Holden brand will disappear.

GM is not the first auto company to leave Australia. Because of the dim outlook， Mitsubishi quitted the Australian market in 2008. Ford followed suit in May 2013 too. It is going to close two of its plants in Australia， which can produce assembled cars and engines.

GM is unlikely to be the last one to quit the Australian. Before the announcement of GM， Toyota also said carefully it would talk with suppliers， important shareholders and government about the next step and whether Toyota should run its Australian branch as a manufacturer. Toyota is now the only auto company that produces cars in Australia apart from GM. And， as the Labor Union of Manufacturing Workers in Australia believed， Toyota is possibly to leave as well.endprint