Stas

In: Philosophy and Psychology

Submitted By stas
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Foreign Debt
A little bit should be said about foreign debt in Australia at that time as it can help to understand the system in more details rather than saying that as a common thing. Basically the foreign debt it is the necessity of borrowing money to finance imports. Borrowing is not such a bad thing as you might think at first it is good as long as the government needs to help the country during hardships like recession, tax revenues fall, etc. some of these factors were happening in Australia during from 1980’s to 1990’s. As we know from this report that Australia suffered really huge hardships within economy and finance and we know what they actions were taken towards microeconomic reform like labour reform, taxation, financial deregulation, privatization and etc. but most important thing that was found in my opinion is foreign debt. The foreign debt occured in Australia because of the bad time during 1970s-1990s the government was not able to support the country without increasing its foreign debt. Graph 1 shows us that the foreign debt was rapidly increased
GRAPH 1

But it is not as bad as it seems to be, as long as the government borrowed this to improve its productivity and manufacture. Then it would excuse such a huge amount of money borrowed by the government. Also what we know at that time the government decided to sell some of their businesses to public sectors, and some business they bought from public sectors. Now let’s look at GDP that was growing up since 1970 it will help us to understand whether the money that the government borrowed was used properly in terms of the whole economy in Australia.
GRAPH 2

As it seen that since that time when we had all the microeconomics reform and changes in some specific sectors we must say that the government did well at that time. Probably the Government was welcome to see people with ideas of…...

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