Paper Example on Aus Mining Boom of the '60s-'70s: Impact on Real Per Cap Income & Commodity Prices

The mining boom in Australia from the 1960s to 1970s is a period of economic transformation that changed the nation's financial status. This era was different because the mining boom boosted the real per capita income by 13% by the year 2013. The increase also contributed to the Australian dollar's appreciation because some industries were exposed to trade, such as agriculture and manufacturing. Since the boom era, the prices of commodity have never remained the same. The essay will argue how the mining boom had an impact on Australia’s economy since the era and today’s situation

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In the 19th century, the policymakers in Australia came up with innovative proposals to deal with the aftermath brought by the boom. The floating exchange rate was the only way to facilitate growth. The fiscal and monetary policies were also furnished to adapt to market changes. The government was also presented by the boom in the complicated economic issues, especially the desire for rapid growth in the manufacturing and infrastructure sector, employment sector, and financial area to meet the high demand.

The government had a mandate of making the economy scalable to maintain the rational macroeconomic interventions to restrain inflation triggers that were affected by growth. The idea cultivated a culture that had economic consistency because of the increased growth in Australia several decades ago. Arguably, the financial status of Australia between the years 1960 to 1970 was economically changed by the mining boom. The era controlled the rate of inflation, regulated the demand for goods, created job opportunities, and improved exports and imports because of tax favoring businesses.

Australia's financial growth began in the 1960's when the commonwealth authorities banned the exportation of iron ore because it had crippled the export of minerals for several years. The demand then grew because the available market triggered it from the U.S, Japan, and the U.K. Also, there was the readiness of the economic power that wanted to invest in the nation. Even though the markets from Asia were presented in Australia as agricultural goods, iron ore importation from Japan to the western part of Australia became the only trajectory shift that expanded the economy in that region.

Before the creation of the resources industries during the boom era, economic plans were affected because income per capita limitation existed between the years the 1940s to 1950s. Nevertheless, the mining boom increased, and Australia's per capita doubled in 1970. While the nation's traditional business was mining the iron ore to improve its economy, the resource upsurge that took place in 1960 became a vital facet that differentiated iron mining and gold rush since the mineral was exploited in the boom era.

As a result, the country also dealt with minerals, coal, alumina, oil, nickel, and bauxite to spur its supply chain from 1960 to 1970. Australia not only did this for its citizens but also with the neighboring countries. During the industrial era of trade relations, the critical economic growth for Australia was also a similar situation in Japan.

Since the boom era increased the global market demand, it also favored Australia because it was near Japan. After all, transporting minerals was cheap, and economically it was lucrative to most businesses. The 1960s to 1970s boom was different from the one that took place in 1800 because of the corporate investors that invested more in mining projects.

The more extensive and intensive mining projects were triggered because of the resources developed, the wider the broad supply base globally. The advancement of technology in the 20th century expanded the large-scale production to the industries to maximize production. The gross domestic products in investments in mining also increased to 0.5% and climaxed three times by the end of the 20th century.

The export business and prices increased by 1973 and culminated in the rise of profits on the production chain and exporters. As a result, there was a payment balance that reflected due to the increase in the surplus. However, five decades later, the development has remained the same. Job opportunities grew from 1956 to 1969 every year. By 1973, their earnings also increased to 15.3 because of the government law embraced to cushion citizens since the commodities were high. In the process, the buying power changed everything because products were limited both in the global and local markets.

A suitable example is seen in 1973, where the Organization of Petroleum Exporting Countries increased the crude oil price, thus threatening employment opportunities along the supply and production lines. Worldwide inflation also had double digits increase, which made the West go to a recession. Since Australia wanted to prove that they were not affected by the downturn, Frank Crean, the treasury secretary, told the citizens that the mining boom gave people more opportunities to work in the same infrastructure industry but under different subsectors.

Regardless of the economic sector's improvement due to the large-scale production, citizens settled adjacent to the infrastructures and production lines. The settlement also created the women involved in the supply and production chains, thus making the growth of employment uniform. The significant increase was also facilitated by the remuneration plan centralized for workers.

The boom also changed the exchange rate to a nominal status and under the policymakers' rules until it ended. The reason behind this is that it stabilized the country's currency in 1970 and made the economy rise again to achieve long-term growth consistency. The 20% increase in the currency flow was felt between the years 1970 to 1974. The growth also embraced the facilitation of the fiscal laws that arguably had an impact on Australia inflation.

The Australian governement responded to the inflation by roping in measures that would reduce the tariffs to cushion people from the aftermath. The margins gains by the manufacturers were reduced through a 25% cut tariff to strengthen the dollar value similar to the American dollar. The policy arguable protected the manufacturers from being affected by the hard economic times while boosting international trade between the nation and the trading partners in an out of Asia.

The benefits of such moves were noticed when the import quotas introduced by the government were meant to secure jobs in the manufacturing sector. In the mid-1970s, both global and local economic areas felt the pinch because growth was slow to the point that it increased commodity prices. The effects that positively impacted the country also ended. Most investors limit their mining projects and make the country go through triggering inflation and slow growth.

Although the substantial economic growth gained by Australia during the era triggered financial shortcomings, it also affected the world's finances. Both economic tiers of the economy strained, and the inflation impact on all felt in all sectors. For instance, in 1974, the belief that Australia was growing was not valid because the government lost direction during the implementation of the micro and macro-economy policy. The same year, however, the economy of Australia dropped

The damage began when the unemployment rate increased to 2% before rising to 5 percent. The efforts to create other jobs also failed. The boom era was when the prices for commodities and earnings from employees spiraled and became uncontrolled. Most prices went as high as 16%, which prompted new trade unions to reward for the hard times. During this time, the current account for Australia defied the ideal of growing the economy and went into deficit.

By June 1973, only 1.5% surplus failed, and this made the transactions pending between Australia and the partners to decrease to a deficit of 3.2 % by the end of 1974. Around that time, the profits also reduced and affected the trade union’s disengagement with the employers. In real estate, the boom was expected to sort the issue if housing but also failed because it never met the high demand. This also triggered the steepest fall that has ever happened in Australia.

Economists have concluded that the 1970s was the sunset time of the economic growth of Australia. The sunset years instead were times of expenditure failure that never generated tangible gains. While the administration of Whitlam preceded with the expenditure reforms, they were restrained by economy and finance experts to increase the commonwealth budget by 46% to increase the 20% level by the end of 1970’s.

Even though the government came up with interventions such as policy papers to intervene during the mining boom era, the treasury tried to boost the economy. Still, it failed due to the existence of populist figures in the cabinet. However, the approach was regrettable because the policies never favor people but embarked on ways of improving on the reforms that would initiate sectors such as infrastructure, environmental healthcare, and education improvements. The government also failed to deal with inflation impact because the economy decreased to 6% growth by 1973 due to the private boom sector.

The Australian trade council union, in conjunction with the National Wage case, whooped a $10 increase in the weekly indexation and wages four times in a year to raise the wage rational. Even though the court wanted the employers to increase the salary of workers to 4.5%, the metal industries association paid their workers five times more than the required range.

The significant increase in salary led to a wage competition contrary to the economic pointers’ expectations to improve the living standards of regular employees. The standoff of the government’s populist also complained about the increase in salaries for six months because the nation lost millions that would have been used in other ways. As a result, the employers could not sustain the high-salaries because of the big numbers.

Since the government made efforts to handle the financial issues in Australia, it was voted again during the 1974 elections. Still, the interventions that tackled the cosmetic economy crumbled and failed. The profit margins also decreased because of the high wages that were shrinking the economy not only in Australia but worldwide. The choice of reducing the manufacturing margins to 25% was also affected because of the country’s exports and imports. 1974’s second quarter also triggered a further 2.5% dip beside the fall of the industries in the GDP.

Conclusion

The argument here is that neither the treasury nor the executive had an idea of the adverse trajectory of the economy’s direction but kept blaming the inflation. Due to this, the government embraced the stopgap laws to mitigate the inflation effects and to restrict premiers that are created from the budgetary allocations. The government also suspended the capital-intensive policies to cut down and abet the inflationary character due to the high demand from the local market. The treasury also delayed the growth of the economy because it stagnated both indirect and direct taxes.

Seemingly, since the government developed rational interventions, they never succeeded in increasing growth. Since the government wanted to boost the economy with 5% by 1975, most employers made their workers redundant. Later the government noticed that the implemented stopgap rules could not solve the issues of employment. By 1975, the rate of unemployment increased to 4%. Sixteen weeks later, after the measures for reducing inflation were implemented, the government asked the treasury to raise funds that will boost the economy...