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[VisualPolitik] Why is there no crisis in Australia? - Printable Version

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[VisualPolitik] Why is there no crisis in Australia? - Ajay Alcos - 29.05.2017 16:34



An interesting video which highlights some of the ways and means that Australia has pursued to maintain its prosperity and the level of its economic development. What do you guys think and what policies do you believe other countries can take and emulate from the land Down Under.


RE: [VisualPolitik] Why is there no crisis in Australia? - Hilder - 26.09.2017 22:12

The main policy - not to seat on the oil faucet Smile


RE: [VisualPolitik] Why is there no crisis in Australia? - cloudsky01 - 27.09.2017 01:28

Australia has benefitted hugely from its relationship with China and its proximity to Asia. China is the largest importer of Australian coal and iron ore, and the export of Australian education services to Asia has also been very large. Part of the reason Australia largely avoided the effects of the Global Financial Crisis was because of its trade relations with China, which kept the country afloat (alongside hefty government stimulus spending).

The superannuation scheme and currency reforms in the 1980s were certainly beneficial to the Australian economy. Australia also has a comprehensive mixed healthcare system, which is funded by the government, but care can be improved by investing in private health as well. Australia also has "free" tertiary education, in which students accumulate an interest-free debt over their time studying which is automatically repaid in small increments once a person earns over a certain income. This has made higher-level education highly accessible to Australians.

These policies have been good in many ways, but they aren't without criticism. Australia isn't quite as perfect as the video makes it sound, but, as an Australian, I can say that it's a good place to live Big Grin


RE: [VisualPolitik] Why is there no crisis in Australia? - CommieScum - 06.10.2017 16:15

Ajay Alcos Wrote:


An interesting video which highlights some of the ways and means that Australia has pursued to maintain its prosperity and the level of its economic development. What do you guys think and what policies do you believe other countries can take and emulate from the land Down Under.


Principally, Australia has a stout free market and has robust trade agreements with factions that habitually do not. This has allowed protracted opulence; Social Democrat officious interventionist doctrines have typically not destabilized the Australian economy, despite of the historical precedent of the contrary. Emulating the principle is arduous, because Social Democrats habitually have durable factions in western republics, via a complex network of robust propaganda, terrorist, and union complexes premeditated to perpetuate and propagate their authority. However, to emulate the Free Market principle is to create boundless opulence; to obtain the principle in their peculiar motherlands, Free Market Capitalists must chip away against the Social Democrat - Socialist coalition(s).


RE: [VisualPolitik] Why is there no crisis in Australia? - Ajay Alcos - 27.11.2017 15:41

cloudsky01 Wrote:
Australia has benefitted hugely from its relationship with China and its proximity to Asia. China is the largest importer of Australian coal and iron ore, and the export of Australian education services to Asia has also been very large. Part of the reason Australia largely avoided the effects of the Global Financial Crisis was because of its trade relations with China, which kept the country afloat (alongside hefty government stimulus spending).


QLDer here Big Grin

As you say, it is simply natural for our proximity to East Asia (particularly China and Japan) to provide a significant boost to our economy (especially as our volume of trade with the U.K. began to fall following the war). When considering the fast-paced growth of emerging economies in Asia almost overnight, this in-turn provided a greater market for Australian enterprises, particularly those taking part in the bread and butter of our economy - commodities. On the other-hand Australian industry (particularly low-end manufacturing) found it difficult to compete with these newly-industrialized economies and thus alot of them such as textiles and car-manufacturing have steadily declined in economic share (to be fair though, our geographic location makes Oz not very ideal in terms of manufacturing). However the benefits have far outweighed the pitfalls so far.

Regarding China, I'm a bit concerned on that front. Sure, over the past couple of years, the share of Aussie exports going to China has fallen from what was once over 1/3 of overall exports to less than 1/3. On the other-hand, although the Chinese have still managed to maintain quite a large degree of annual GDP growth (Though I would treat Chinese economic figures with a grain of salt I must say). Ballooning local government and private sector debt in China, which has culminated in quite obvious "bubble-fueled growth" in certain parts of the country are causes for concern. Of course, any problems that might arise from than can be mitigated by Chinese authorities placing greater emphasis on trying to fix those problems or by Australia shifting a greater proportion of its exports onto other emerging markets/regions such as South Asia, ASEAN and East Africa. Though whether there is enough time for those places to grow fast enough and whether our industries and diplomatic assets are able to obtain trade-deals with those regions before China potentially bursts is another question altogether.

cloudsky01 Wrote:
The superannuation scheme and currency reforms in the 1980s were certainly beneficial to the Australian economy.



I agree, though more could have been done.

Howard could have used the commodities boom of the 2000s to establish a "Sovereign Wealth Fund" similar to that of Norway. Instead he squandered that opportunity by instead utilizing increased revenue to lower certain taxes, subsidizing inefficient industries (Holden/Ford) and over-saturating the export industry with government capital. As a result, Canberra is still stuck with trying to get the budget back to surplus and our national debt is higher than it should've been.

cloudsky01 Wrote:
Australia also has a comprehensive mixed healthcare system, which is funded by the government, but care can be improved by investing in private health as well.


It depends by what method. Subsidizing the private health insurance with government funding would be grossly inefficient (public money that could be spent on purchasing new hospital equipment or hiring more doctors). However providing greater incentives to the middle class such a tax-credit here and there would be a very sensible course of action.

cloudsky01 Wrote:
Australia also has "free" tertiary education, in which students accumulate an interest-free debt over their time studying which is automatically repaid in small increments once a person earns over a certain income. This has made higher-level education highly accessible to Australians.


That does have its flaws though.

A significant degree of our alumni that have graduated through that system have simply taken up jobs in more higher-paying countries (i.e. the U.S) not only for the salaries but conversely to avoid having to pay back their HECS dues. I can't argue though that it has been an effective mechanism in lifting lots of lower-income individuals into more technical/professional and higher paying jobs. However more needs to be done to stop people abusing that system. Maybe by mandating that graduates have to stay in Australia for a period of X years (unless they've paid back such debt in full of course), or alternatively, automatically taxing such alumni who've immediately taken up higher paying work overseas.

cloudsky01 Wrote:
These policies have been good in many ways, but they aren't without criticism. Australia isn't quite as perfect as the video makes it sound, but, as an Australian, I can say that it's a good place to live Big Grin


Australia. A bit too pricey, but definitely worth every penny Wink (unless you live in Tasmania).


RE: [VisualPolitik] Why is there no crisis in Australia? - cloudsky01 - 28.11.2017 03:41

Ajay Alcos Wrote:

cloudsky01 Wrote:
Australia also has "free" tertiary education, in which students accumulate an interest-free debt over their time studying which is automatically repaid in small increments once a person earns over a certain income. This has made higher-level education highly accessible to Australians.


That does have its flaws though.

A significant degree of our alumni that have graduated through that system have simply taken up jobs in more higher-paying countries (i.e. the U.S) not only for the salaries but conversely to avoid having to pay back their HECS dues. I can't argue though that it has been an effective mechanism in lifting lots of lower-income individuals into more technical/professional and higher paying jobs. However more needs to be done to stop people abusing that system. Maybe by mandating that graduates have to stay in Australia for a period of X years (unless they've paid back such debt in full of course), or alternatively, automatically taxing such alumni who've immediately taken up higher paying work overseas.


I'm honestly conflicted on my feelings about the uni system here. For one, there's the issue of debt-dodging, as you said, which I think is exacerbated by fee increases. I think, though, that the biggest problem is the number of students who end up either (a) seeking occupations promoted by universities that are already saturated with job applicants, and are unable to find work (for example, law students), or (b) not using their degrees because they don't have any practical use for it (to minimise the controversy here I won't provide any specific examples Hehe). The outcome is that debt is pointlessly accumulated by either the student or the government (depending on the student's income) while the university extracts all the benefit.

On the other hand, as I mentioned earlier, education exports are highly valuable, as well as the flow-on effects from having a large number of international students living in the country, so any changes to the system should take care not to dissuade international students from studying here.


RE: [VisualPolitik] Why is there no crisis in Australia? - Ajay Alcos - 29.11.2017 05:40

cloudsky01 Wrote:
I'm honestly conflicted on my feelings about the uni system here. For one, there's the issue of debt-dodging, as you said, which I think is exacerbated by fee increases. I think, though, that the biggest problem is the number of students who end up either (a) seeking occupations promoted by universities that are already saturated with job applicants, and are unable to find work (for example, law students), or (b) not using their degrees because they don't have any practical use for it (to minimise the controversy here I won't provide any specific examples Hehe). The outcome is that debt is pointlessly accumulated by either the student or the government (depending on the student's income) while the university extracts all the benefit.

On the other hand, as I mentioned earlier, education exports are highly valuable, as well as the flow-on effects from having a large number of international students living in the country, so any changes to the system should take care not to dissuade international students from studying here.


So true.

I think that raises the equally important question of more frequently educating students, primarily when they are in senior school about basic economic theorems; in particular supply and demand. I'm sure most students in high school at least touch upon the subject albeit briefly, but from my experience the theory was taught but very little empirical data was offered up. Of course, the education system is setup to incentivize students to specialize in a particular subject or course; primarily by getting them into trades or hard-sciences. However it is also just as important for students to be educated with the greater knowledge of navigating the job market or else we'll find that their are more inconsistencies than one would otherwise have found.

Lastly, setting up a system which gets all the right incentives and expunges all the loopholes is becoming almost (if not more-so) as difficult as perfecting a jet-engine. And as things become more convoluted such as when new innovations are discovered, it would only be natural for systems to end up becoming complicated as a result. Such an occurrence is unavoidable, but it is also in the interest of most people for such systems to be simplified lest they endure certain inefficiencies; hence the need for constant yet cautious experimentation. But yeah, achieving the right incentives is always going to be a muddy affair.