Impact of Economic Growth on Australian Sectors

This assignment provides an analysis of the impact of economic growth on different sectors in Australia. It explores the effect of a weak Aussie dollar on Qantas Airlines, increasing their profitability due to lower ticket prices and reduced international competition. Additionally, it examines the impact of a weak currency on Australia's tourism industry and higher education sector, highlighting how it can lead to an increase in international students and a rise in domestic tourists.

Economies for Manager

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Question 1...............................................................................................................................1
a. The predictable possibility of a product after approval and before expiry of patent..........1
b. The predictable profitability during these first few month after generic drug entry..........1
Question 2. The sources for economic profit of Qantas and strategies used by them............1
Question 3. The impact of weak Aussie dollar on Australia's tourism industry and higher
education sector......................................................................................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Australian economy is one of the most powerful economy in world. Every sector whether
the airline sector, tourism sector or educational sector has contributed in the economy of the
country. The present report is based on the different sectors Australia. The report will discuss
about the sources by which the Australian Qantas has made economic profit, with the strategies
used by them. Further, the impact of weak currency on tourism and educational system will also
be discussed in report.
MAIN BODY
Question 1
a. The predictable possibility of a product after approval and before expiry of patent.
Drug patents allows the companies, having invested heavily in new products as it has the
monopoly on the industry. After getting approval from the patent, there is a high chance
of ,making profit before the expiry of patent as the owner have full right on the generic product.
During the patent period, no company can introduced the similar product in the market. It will
help the company to earn profit on future sales of the product until the expiry of drug. Patent
protection will help the owner to make profit so that it can be used in R&D of other
pharmaceutical products.
b. The predictable profitability during these first few month after generic drug entry.
It may be granted at any time during drug development and may cover multiple claims
for the drug. After the expiration of patent right, the door for rivalry with the similar products are
open for the competitors. When a patent expires, however, lower-priced versions of the item can
be introduced by rivals. As the restrictions are not so much, the profitability of the owner after
expiry of patent the amount of profitability will be reduced as there were so many products now
available in the market. It will force the company to adopt new pricing strategy, like lower down
its price to be competitive in the market.
Question 2. The sources for economic profit of Qantas and strategies used by them.
Qantas Airways is largest airlines of Australia, and one of the most oldest airlines in the
world. As per considering the annual report of Qantas airlines of 2017-2018, it has generated the
highest profit of $1.6 billion (underline profit before tax). As addressed I n the income statement
of 30th June 2018, the company has made revenue of $17060 million in 1st half of 2018 as
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compared to $16057 million in 2017 (Qantas Annual Report 2018 ,2018). Qantas had made a
statuary profit after deducting income tax is $980 million which as compared to last year’s profit.
The sources from which Qantas has made an economic profit can be:
Cost-Cutting: Company has announced to cut $2 billion of annual costs in three years.
Qantas has proven highly successful in achieving major cost saving which reached to $374
million in the first half (Karam and Muir, 2018). Several Australian association have signed new
agreements that has given the airlines the traction it needs to get remaining unions on board and
has allowed it to fight the normal wage creep of about 3% a year.
Lower oil price and carbon tax banned: Qantas has receive a $120 million full-year
benefit from the removal of the carbon tax in Australia and prices of fuel has also dropped in
country which has provided benefit to Qantas of $33 million (Qantas Annual Report
2018 ,2018). Qantas has chosen to keep majority of profit from the lower oil price which was
passing it on the consumer with lower ticket price which helps in increasing their profitability.
Less international Competition: as a result of the lower dollar rate in Australia, the
rival’s growth rate are dropping in Australia, which is a benefit factor for Qantas. The company
has shown growth with improvement in its majority of routes (Pratt and Alizadeh, 2018). The
international flights has recoded fall by .7 percent compared with the year-earlier month as
shown by government data.
Question 3. The impact of weak Aussie dollar on Australia's tourism industry and higher
education sector.
The Australian economy is going strong but the performance of the Australian currency
is not so strong as compared to its economy. Continuous weak Aussie dollar are impacting many
sectors, including Australian tourism sector.
If value of a currency weakens it persuades international travellers to visit the country as
it is cost effective. (Pham, Nghiem and Dwyer, 2018). A survey by industry group Tourism and
Transition forum found that 5% of tourism has chosen to travel in domestic destination rather
than going abroad because of the fall in Australian dollar. But it is also expected that the
travellers in domestic destination will expected to increase by 15% in coming years.
Impact of weak currency on higher education sector
Education sector in Australia is third most valuable export, because of the weak currency,
the country has witness the increase in international students in universities, as the cost of study
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has raised due to high dollar prices. It is found in a report that 51% of international students are
satisfy with their living cost in Australia (Foster, 2018).
CONCLUSION
By summing up the above report, it can be concluded that economic growth of a country
is depend on various sectors. The present report is based on different sectors of Australia and
their growth. The present study has concluded the sources and strategies for the bumper profit of
Qantas airlines. Report also summed up the impact of weak currency on tourism and educational
system of Australia.
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REFERENCES
Books and Journals
Foster, G., 2018. Education Policy Reforms to Boost Productivity in Australia. Australian
Economic Review. 51(2). pp.253-261.
Karam, M. P. D. and Muir, M. D. V., 2018. Australia's Linkages with China: Prospects and
Ramifications of China's Economic Transition. International Monetary Fund.
Pham, T. D., Nghiem, S. and Dwyer, L., 2018. The economic impacts of a changing visa fee for
Chinese tourists to Australia. Tourism Economic. 24(1). pp.109-126.
Pratt, S. and Alizadeh, V., 2018. The economic impact of the lifting of sanctions on tourism in
Iran: a computable general equilibrium analysis. Current Issues in Tourism. 21(11).
pp.1221-1238.
Online
Qantas Annual Report 2018 .2018 [Online] Available
Through:<http://investor.qantas.com/FormBuilder/_Resource/_module/
doLLG5ufYkCyEPjF1tpgyw/file/annual-reports/2018-Annual-Report-ASX.pdf>
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