Impact of Bushfires on Australia's GDP and Unemployment Rate

This article discusses the negative impact of bushfires on Australia's gross domestic product (GDP) and unemployment rate. It explores how the consumption expenditure, investment spending, and economic conditions are affected by the bushfires. The article also highlights the importance of measuring unemployment rate accurately and the role of China as Australia's top export market.

Assessment

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
QUESTION 1.........................................................................................................................1
QUESTION 2.........................................................................................................................2
QUESTION 3.........................................................................................................................3
CONCLUSION ...............................................................................................................................4
REFERENCES ...............................................................................................................................5

INTRODUCTION
Gross Domestic Product is basically the monetary value of each produced goods and
facilities within a country's boundaries within a particular time frame. Consumption expenditure
is basically the spending by households on goods and services, excluding new housing. It is also
determined that the government of China is always looking to encourage a valid transaction in
the context of service and consumption that helps in developing sustainable growth.
MAIN BODY
QUESTION 1
The gross domestic product of a nation depends on different types of factors such as
availability of funds, environmental condition, economical condition and many more (Current
bushfire crisis in Australia impacting GDP, 2019). Any major fluctuation in these factors can
lead to a negative impact on the overall gross domestic product. In the aspect of Australia, this
can find out that in the current bushfire government has invested a huge amount of funds to take
control. As well as environmental conditions also get affected negatively. Due to this, the GDP
will be affected negatively.
The gross domestic product is calculated by the addition of consumption, investment,
government spending and net exports. Because of bushfire in Australia, consumption expenses
will be higher. This is so because some part of crops was based on forest in Australia and after
this bushfire, there will lack of produced products. In the context of Australia, due to bushfire,
there will the reduction in the gross domestic product and as a result per person capital will
reduce. Also, the rate of unemployment will raise in the year 2020. These factors will affect the
gross domestic product of Australia in a negative manner.
This negative impact on GDP cannot be prevented because it is arising because of natural
disaster. Apart from it, the economic condition of Australia will also affect for upcoming years.
The reason behind this is that gross domestic product is directly linked with financial condition
of a nation. If GDP will be negative, then automatically economy will also decline with
encompasses of time. For example before bushfire the GDP of Australia was of $1.89 trillion.
But this fire different elements of GDP will be affected negatively such as capital expenditure
and investment spending will change. These expenses will be lower that may result in decreased
GDP. In GDP of year 2019, the consumption expenditures were of $267716 million and
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investment spending was of 92.1 billion. Due to bushfire this level of expenses will be lower the
consumption expenditure may decrease till $200000 million as well as investment spending will
also decrease and can become of 80.00 billion. As a result, GDP may decrease till $1.50 trillion.
Consumption expenditure are mainly the circulation of money among the household and
the product market. On the other side, the amount of expense made by business organisation for
consumption of final goods and services is known as investment expenditure. These are
specifically made for the purchase of capital goods. For example, expenditure made on buildings,
pipelines, oil wells, computers and vehicles used in the business organisation. For more example,
C=1+0.75Y
The main 2 feature relater with the above consumption expenditure function slope along with
intercept that also can be determined with the help of line is discussed below:
 Slope: The slope of the consumption line presented here is positive, but less than one. In
this case the slope is equal to 0.75. Click the [Slope] button to highlight.
 Intercept: The consumption line intersects the vertical axis at a positive value of $1
trillion. Click the [Intercept] button to highlight.
QUESTION 2
In the entire article, the main argument of the author is regarding the fake news related to
the unemployment level in Australia is being published in wrong ways. As the viewpoint of the
author state that people who are old, children or not physically prepared are not considered in the
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unemployment index. This keeps the report transparent as both internal and external and that's
what you really should be able to compare with each other over time and throughout countries.
This should be article-blaring and it can be considered believed only by the vain and self-
centered. For today, the rate of unemployment of 5.8 % is even worse than it was in April 2004,
but an unemployment rate that listed one-to-nine week employees as unemployed will be 10.3 %
a figure that was probably lower than that in April 2004. Another fascinating one is the idea of
part-time workers.
Considerable difficulties are trying to recreate them since the level where people are
depressed will vary considerably. The claims of employees working 1 hour a week by Greg
Jericho were not strong sufficiently show that there was no question, but they are certainly good
enough to demonstrate that there is no simple answer (Australia Unemployment facts, 2020). In
the article, he often shows that the issue is comparatively small in that field, to the degree it
occurs. Excluding working-age people renders the output unconscious to a fill-up in economic
development, as many of those economically inactive would move to the formal workplace at the
first hint that they may have a career. It ensures that the number of homeless people receiving
employment during the first year or two of an economic expansion is offset by the number of
underemployment beginning to look for jobs again and thus being included in the unemployed.
Thus it is stated that the rate of unemployment is considered to be an effective figure in case if it
is measure in a specific manner and calculated by knowing limitations.
QUESTION 3
In recent time, it is observed that China is the topmost export market to Australia which
help in increasing the level of FDI and is considered to be the biggest agro-goods export market.
Form a vast time, export is a major factor that has underpinned the Chinese economy to grow
and maintain a better standard for development. China is also Australia's biggest foreign
consumer of farming, forestry, and fishery goods, with purchases in 2017-18 ranging
approximately AUD 13.5 billion. Australia's major products from China are consumer goods
valued as much as AUD 21bn in 2018 and are driven by telecommunications equipment, IT
devices, appliances and home-ware. The commodities exports to China scored the second-best
mark in June at A$ 10.34 billion, a rise of nearly 40% of last year. Similarly, the sales of LPG to
china and other nation is regarded to be the main developing areas contributing to export
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earnings of around 14 % which is approx 4 billion Australian dollar (Export merchandise from
Australia to China, 2020).
Apart from world-renowned retail brands, fashion items of fine quality, fashionable
trends and more exclusive, creative or niche characteristics are beginning to target mid to higher-
income buyers. It creates opportunities as well as the opportunity for a niche sport in the Chinese
market for Australian luxury brands and more trendy innovative fashion designers. The
Australian Agriculture Department estimates that China will compensate for 43% of global
economic growth in foodstuff production by 2050. The projected main rise in prices is for
products like meat, pork, dairy, fruits and vegetables. Australian goods have had an enviable
reputation for cleanliness, quality and most suitable to eat. That has a highly strong place in
Australian exporters which can exploit China's increasing demand for quality goods and its need
for agriculture. Thus many companies are already being working in these specific areas to
provide useful services and goods that keep a regular flow of operations in China. For example,
in recent time people are more focused to consume healthier food product for consumption, thus
Australian organic production increase by 55% per ton which is being exported to china in 2017.
Moreover it is determined that supplement related with dietary and vitamins are also demanded
by customer in large span which increases the sales by 9.4% RMB135.4 billion in 2017 and are
forecast to grow 8.4% annually to 2022. We also find that sport fitness items had risen to
RMB1.4 billion by 47 per cent and are expected to rise to RMB3.9 billion by 2022. Sales of
weight control and health goods have also risen to RMB11 percent by 7 per cent and are
expected to rise to RMB19.2 billion by 2022.
CONCLUSION
In the end of this essay, it is concluded that Australians selling to China, taxes and taxes
are measured on the entire shipment value including the products, shipping and insurance
premiums. China's want of more modern housing, more renewable energy usage, a change from
coal and oil to less harmful to the environment power sources and new transport systems all
provide prospects for collaboration. As well as a shortage of raw material will also raise. Also,
investment expenditure will reduce. It is so because the level of investment increases only if
people have enough amount of funds to invest.
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REFERENCES
Books and Journals:
Current bushfire crisis in Australia impacting GDP. 2019. [Online] Available Through:
<https://www.theguardian.com/australia-news/2020/jan/08/economic-impact-of australias-
bushfires-set-to-exceed-44bn-cost-of-black-saturday>.
Australia Unemployment facts. 2020. [Online] Available Through:
<https://www.theguardian.com/business/grogonomics/2017/may/30/to-those-who-
claim-australias-unemployment-data-is-dishonest-please-stop>.
Export merchandise from Australia to China. 2020. [Online] Available Through:
<https://www.austrade.gov.au/Australian/Export/Export
markets/Countries/China/Market-profile>.
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