A Pestel Analysis Of Australia Economics Essay

A Pestel depth psychology Of Australia sparings EssayAustralia is a farming in the Southern cerebral hemisphere comp wage hike the main fetch of the Australian continent, the island of Tasmania and numerous sm entirelyer islands in the Indian and peace-loving Oceans. Neighbouring countries intromit Ind unitysia, East Timor and Papua advanced Guinea to the north, the Solomon Islands, Vanuatu and New Ca guideonia to the northeast and New Zealand to the southeast.For at least 40,000 years before European settlement in the freshly 18th century, Australia was inhabited by indigenous Australians who belonged to one or to a greater extent of roughly 250 language groups. After disco truly by Dutch explorers in 1606, Australias eastern half was claimed by Britain in 1770 and initially settled with penal transportation to the colony of New South Wales, formally founded on 7 February 1788 (although formal possession of the land had occurred on 26 January 1788). The tribe grew steadily in subsequent decades the continent was explored and an supernumerary five self-directed Crown Colonies were establish.On 1 January 1901, the six colonies became a federation and the land of Australia was formed. Since Federation, Australia has maintained a persistent liberal democratic political dust and is a body politic rattlingm. The population is 22 million, with approximately 60% satu setd in and around the mainland raise capitals of Sydney, Melbourne, Brisbane, Perth and Adelaide. The nations capital city is Canberra, in the Australian crown Territory.A prosperous developed ground, Australia is the worlds thirteenth largest thrift. Australia ranks lavishlyly in many an(prenominal) an an opposite(prenominal)(prenominal) inter matter comparisons of national performance such as gracious nurture, quality of life, health c atomic subprogram 18, life expectancy, public education, stinting freedom and the fortress of civil liberties and political rights. Austral ia is a member of the United Nations, G20, Commonwealth of Nations, ANZUS, OECD, APEC, Pacific Islands Forum and the World Trade Organization.PESTEL ANALYSIS at that place be many factors in the big-environment that go out effect the decisions of the managers of any organisation. Tax changes, newborn laws, sell barriers, demographic change and regime activity form _or_ system of government changes ar all examples of macro change. To help analyse these factors we sight categorise them using the PESTEL model. polity- fashioning factors. These signify to government policy such as the degree of intervention in the economic system. What ripes and services does a government want to provide? To what extent does it study in subsidising firms? What argon its prior(prenominal)ities in terms of argumentation support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastr ucture of the economic system such as the road and rail systems.The federal government is quarantined into three branchesThe legislature the bicameral Parliament, comprising the Queen (represented by the Governor-General), the Senate, and the House of RepresentativesThe administrator the Federal Executive Council, in practice the Governor-General as advised by the Prime Minister and Ministers of StateThe judiciary the High Court of Australia and other(a) federal courts, whose judges are appointed by the Governor-General on advice of the Council. descent in Australia has a high degree of certaintyAustralia is a gumshoe destination for investment. The countrys political and regulatory environment is stable, open and progressive, providing investors with a high degree of confidence and certainty.Australias strength as an investment destination stems, in part, from a political system that has been assessed as universe highly in effect(p) in responding to economic challenges and p olicy direction. The adaptability of Australian government policy to changes in the economy has been ranked in the top two countries in the region.Similarly, the enhancer and in effect(p)ness of government are also rated highly .Efficient and miasmic jural modelingAustralia also has an open, efficient and transparent legal framework. rotting levels are judged lower than those in the US, the UK, Canada and some regional countries .These results can be attributed to a strong system of checks and balances, and a highly respected discriminative and law enforcement system.Stable political environmentThe benefit to companies of a stable political environment can flow right through to the bottom of the inning line.Australia is one of the most important markets for MNCs in the Asia-Pacific region. Australia hosts a growing economy a stable political and business environment a skilled, well(p) educated and multi-lingual workforce a strategic time-zone and a competitive be base. T hese factors provide a sophisticated market and the right environment alter various MNCs to drive innovation and applied science.ECONOMIC FACTORSProperty prices are broadly high in relation to income levels in Australia, creating a great pack for rental properties. In fact this essential is so high in some major cities that rental prices are firmly set to increase, making any purchase into a get-to-let airplane propeller market potentially profitable. small-arm the population grows and incomes rise, the demand for housing now outpaces bring out, causing prices to continue rising.Capital GrowthAustralia still has certain areas offering great investment opportunity. For example, in 2006 Perth property prices rose by between 36.6% and a staggering 42% and commercial properties in cities such as Brisbane and Perth are also before long offering many excellent returns on investment.Off-PlanPure investment strategies are viable pickaxs in many areas, enabling you to purchase off -plan property in Australia at the best possible prices. Investors purchasing as early as possible with a minimum money-down payment and then selling prior to completion are gaining substantial profits.Low- salute Commercial PropertyAustralias cost-competitiveness has led to a growing number of foreign companies using Australia as a headquarters for their Asian operations. Between January 2002 and March 2003, 54 foreign companies established or relocated their operating centres in Australia, making it one of the most successful countries in the world in attracting such investment. Today Australia consistently emerges as a low cost base amongst developed nations. bullion ExchangeCurrency replace rates against euros, dollars and sterling are very favourable in Australia today, making property investment an attractive option to foreign investors who avoid losing vast amounts of money in their exchange minutes against the Australian dollar. In addition, foreign purchasers are commonl y able to buy much much(prenominal) for their money than back home.Cost of LivingThe cost of victuals in large cities such as Melbourne, Adelaide, Brisbane and Perth is dramatically slight than that of the worlds most expensive cities. At the same time, Australias major cities are all ranked among the worlds top 30 cities in terms of quality of life.Economic StabilityAustralias strong economic growth rates are higher(prenominal) than in most OECD countries including the US and UK. Currently the countrys GDP is higher than that of the UK, Germany and France for example. There is a low degree of risk in the Australian economy while it boasts consistently strong GDP growth, stable interest rates, rising exchange rates, relatively high levels of example and a low rate of inflation.In the main cities unemployment is relatively low and on average the national unemployment figures stand at around 5%. The country receives many applications all(prenominal) year from those wishing to i mmigrate to Australia and enjoy the high standard of living and general opportunities the country has to offer.MortgagesRepayment mortgages are available to purchase property in Australia, covering 75-80% of the valuation or purchase price (whichever is lower) and they are available for a period of between 5 and 30 years. enkindle only mortgages are widely available in Australia and are on offer for 5 or even 10 year periods. societal FACTORSChanges in social trends can impact on the demand for a firms products and the availability and pull up stakesingness of individuals to work.SOCIAL STRATIFICATIONClasses and Castes. The three main social come apartes are the working crystalise, the meat class, and the upper class, but the boundaries between these groups are a matter of debate. The wealthiest 5 to 10 share are usually regarded as upper class, with their wealth derived from ownership and control of property and capital. The growing middle class is defined as individuals with nonmanual of arms occupations.Nonmanual workers typically earn more than manual workers, although upper-level manual workers such as tradespeople earn more than those in sales and personal service positions. The professions, which let in such occupations as accountants, reckon specialists, engineers, and medical doctors, take a leak been one of the fastest growing sectors of the economy. Since the 1980s the number of manual workers has been in decline.Manual workers form the nucleus of the working class 20 to 40 percent self-identify with this category. Class consciousness includes the acknowledgment of class divisions, but there is also a broad commitment to an moral principle of egalitarianism. Australians commonly believe that socioeconomic mobility is possible and exhibit a underlying tolerance and acceptance of inequality associated with social class.Symbols of Social Stratification. The upper-class can be signified by expensive clothes, motor vehicles, and homes. In parti cular, the economic value of housing and other real e raise properties varies greatly crossways different suburbs in all cities.However, class is not always plain from clothes, cars, and living circumstances. Middle-class people from economically wealthy backgrounds whitethorn robe their prosperity according to fashion, choice, or participation in particular subcultures. five-year-old people such as students may dress to mimic imagined styles set for their symbolic rejection of wealth, and some working-class families go into debt to purchase expensive cars and other commodities.Patterns of speech, consumption patterns associated with entertainment and the arts, and participation in certain sports may be useful indicators of class.SOCIALIZATIONInfant Care. Child rearing varies considerably with the country of origin, class background, the education and occupation of the parents, and the religious group to which a family belongs. patch most practices are aimed at developing a re sponsible and main(a) child, Aboriginal and many migrant families tend to indulge young children more than do most Anglo-Celtic parents. Some ethnic groups supervise their young more strictly than the dominant Anglo-Celtic population, encouraging them to mix only with family and friends, be interdependent on the family, and leave decision making to the parents.Child Rearing and Education. Mothers are the preferred primary caretakers, although fathers are taking increasing responsibility for child care. In the past mothers were not as isolated in their child care responsibilities, receiving help from older children, extended kin, and neighbors. The reduction in family and mob size in recent years has meant that the burden of care go largely on mothers. There is noteworthy variation in ideas about(predicate) good parenting, reflecting the diverse cultural values and traditions of parents ethnic background. high Education. Higher education is considered to offer the best employ ment opportunities. Consequently, tertiary education has bugger off more widely available and is undertaken by an increasingly larger balance wheel of the population. It is available in two forms universities and institutions of technical and further education (TAFE). In 1992, 37 percent of women and 47 percent of men received post-school qualifications, and 12.3 percent of the labor force held university degrees in 1993. Universities also attract substantial poetry of overseas students. The government is responsible for funding most universities and institutions, with increasing contributions creation made by students in the form of fees and postgraduation tax payments.TECHNOLOGICAL FACTORSNew technologies create new products and new processes. engineering can reduce costs, better quality and lead to innovation. These studys can benefit consumers as well as the organisations providing the products.Two organizations support most of Australian government inquiry and development . The Commonwealth Scientific and industrial Research Organization (CSIRO), headquartered in Melbourne and founded in 1926, is an fencesitter government agency that supports research and development in all field of the physical and biological sciences except defense science, nuclear energy, and clinical medicine. The disproof Science and Technology Organization (DSTO), headquartered in Canberra, supports military research and development by providing scientific and technological assistance to the Australian Defence array and Department of Defence.Several issues dominate current Australian science and technology policy the concentration of research and development in national research centers tensions among and between university researchers over allocation of research and development funding resources effective communication between persistence, government, and university researchers the growing economic consumption which industry is playing in support of national research and development and the fiber which Australia is playing in international science and technology collaboration. High-technology exports totaled $1.5 million in 1998. political relation funds about 55% of all research and development and industry about 40%. In 1996, there were 73 agricultural, medical, scientific, and technical captain associations and societies, the foremost of which is the Australian Academy of Science, founded in 1954 by royal charter. The Australian Academy of Technological Sciences and Engineering was founded in 1976. The Australian Science and Technology Council (ASTEC) provides an independent source of counsel for the Australian Prime Minister its role was augmented in 1986 by the creation of a post for a Minister Assisting the Prime Minister with portfolio for science and technology.Environmental factorsEnvironmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. Wit h major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities.The Environment security department (Impact of Proposals) function of 1974 establishes procedures for ensuring that environmental impact is considered in governmental decision making. The Whale Protection Act of 1981 prohibits killing, capturing, injuring, or interfering with a whale, dolphin, or porpoise within Australias 200 mi economic zone or, beyond the zone, by Australian vessels and aircraft and their crews. The Environment Protection (Nuclear Co des) Act of 1978 mandates the development of furnish safety standards for uranium mining and milling and for the transport of radioactive materials. The Protection of the Sea (Discharge of Oil from Ships) Act of 1981 and the Protection of the Sea (Prevention of Pollution from Ships) Act of 1983 prevent or limit pollution from oil or corrupting substances.Water being a scarce resource in Australia, problems of urine quality and availability are a constant concern. As of 2001, the country had only 352 cu km of renewable water supply resources, although safe imbibition water was available to all urban and rural dwellers. A travail for concern has been the increased salinity in the Murray Valley, caused by diverting water inland from the coast for irrigation, as well as the rise in saline water tables in Western Australia, due to excessive land clearing for dry-land farming.Another significant environmental problem is inland ill-use due to soil erosion. The quality of the soil is also affected by salinization. As of 1993, Australia had 145 million hact. of forest and woodland and had the third most extensive mangrove area in the world, covering over one million ha.LEGAL FACTORSThese are related to the legal environment in which firms operate. The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle are examples of relatively recent laws that affect an organisations actions. Legal changes can affect a firms costs (e.g. if new systems and procedures set out to be developed) and demand (e.g. if the law affects the likelihood of customers buying the good or using the service.Contractual issuesContracts do not have to be in writing on a formal document and write to be legally binding. The major elements of formation of a contract are offer and acceptance consideration intention to create legal transaction and certainty of terms. Thus, provided these elements are met, a contract may be construed via exchange of e-mails, scribbling on the back of a docket or even vocal exchanges.Compliance with government sanctions and regulationsExporters should be aware that Australia maintains United Nations Security Council sanctions and bilateral sanctions in respect of a number of countries. These sanctions require Australian organisations and individuals to come with a range of measures and, in general, also apply extraterritorially to Australian nationals overseas. Sanctions may include export and import restrictions, prohibitions of technical assistance, training and financing, travel sanctions, and pecuniary sanctions against specific persons and entities.Dealings with terrorists what the Australian business community should knowThe governance has passed laws making it a criminal offence to hold assets that are owned or controlled by terrorist organisations or individuals, or to make assets available to them, punishable by up to five ye ars imprisonment.In addition to the amalgamate List, the Australian governing body also maintains a list of groups that are forbid as terrorist organisations under the Criminal Code.Australian companies need to ensure that they have checked the credentials of overseas partners and buyers. Australian companies also need to be aware that there are scam operations working in some markets and again this emphasises the need to conduct background checks. Before sign or accepting contracts, it is in your interests to seek professional legal advice from legal firms specializing in international work.PORTERS DIAMOND MODELPorters Diamond Factor standard (DFM) is a theoretical framework that achieved prominence in Australian economic policy development since its inception in 1990. Despite its widespread adoption, however, Australia has remained importantly below the OECD average in terms of its industrial clusters contributions to innovation and real wealth creation. In order to conceptual ise the specific role that Porters DFM susceptibility play in the Australian policy development context, this paper analyses the 25-year news report of the interaction between the Tasmanian state government and the Tasmanian gently Shipbuilding Industry cluster. This analysis provides an insight into the set of government roles that facilitated the development of one of Australias most internationally competitive industry clusters, and proposes a reconceptualisation of Porters DFM that will potentially increase its value as a predictive official document for regional economic developmentFactor conditions These are the economists traditional factors of performance land, labor, capital, and infrastructure. bring conditions The characteristics of the domestic market, including the size, demand, value, and sophistication.Related supporting industries The presence of suppliers and supporting industries that are equally competitive and of high quality.Firm strategy, structure, and ri valry The regulatory and other governmental environment in which companies are created, organized, and managed, including the nature of the domestic competition.Since the 1970s, the fire of globalisation in Australias markets has presented significant economic policy challenges to the countrys federal and state governments. A major concern for Australian legislators was the question of making a nation previously protected by a fortress of tariffs and subsidies more productive and competitive in world markets. One theoretical framework that achieved prominence in Australian economic policy development was Porters Industrial Cluster Theory (ICT). Porters ICT proposes that for a region to increase its innovative power and export earnings, its government must interact to develop a sustainable array of internationally competitive industry clusters . Porters ICT argues that a nations industry clusters will likely be internationally competitive if a synergistic interrelation exists betw een four Diamond Factor variables (i.e. Factor Conditions, local anesthetic Demand Conditions, Related and Supporting Industries, and Firm Strategy, Structure and Rivalry) and the two influencing roles of Chance Events and Government for a discussion of the Diamond Factor Model (DFM) that underpins ICT.The role of government in the stage of cluster life cycleThe first was the state governments initial non committal stance towards the development of the states burgeoning shipbuilding industry. At the time, the governments policy focus was primarily on the macro-economic restructuring of the states economy away from its dependence on hydro-industrialisation , and not the growth requirements of the potential industry cluster.The second key role was the state governments development of the regions reputation within the broader domestic maritime market as a national centre for maritime research. The Tasmanian government implemented a series of lobbying initiatives that resulted in the fe deral government providing additional funding to the Australian Maritime College and relocating its national maritime research wreak (the CSIRO) to Hobart. These state government lobbying efforts were largely aimed at the federal government quite a than the private sector, but their success had implications for the regions Factor Conditions, Related and Supporting Industry, and Local Demand Conditions. The regional economys factor conditions were advanced by developing the regions supply of human capital through both the generation of specialised employment and education within the broader industry.The Tasmanian governments enhancement of the regions reputation helped to develop the demand conditions faced by the private sector shipbuilding firms, most importantly in the from of customers ready to import their products from interstate.Competitive advantage of AustraliaInstant entrance money to high technologyGiven the proven track record of hereafter Materials partners, together with our highly skilled, experienced team of professionals, Australian companies now have easy access to the kind of services and equipment previously difficult to attain. For pillow slipMaterials characterization and evaluationProblem solving, such as investigating contaminants and materials failures.Studies and interrogation on coatings, thin films and surface modifications.Expert and independent opinion in litigation and IP matters.Collaborative research aiding the development of new products and processes.Also,The governments policy focus was primarily on the macro-economic restructuring of the states economy away from its dependence on hydro-industrialisation , and not the growth requirements of the potential industry cluster.