The Economic Reality
The reality is that there is a huge infrastructural deficit in Australia. As such, there is a clear need to move away from mining resources to infrastructure investment. This is especially the case since the mining investment has not been yielding the right results as envisaged. To ensure that the investment is not a waste, there is a need to shift it to a more important area.
A country’s infrastructure is the most efficient way through which the country can salvage the economy and support various other projects and sectors. The pressing need facing the government is the need to avoid recession by all means. To do this, investments need to have a direction, as against being just anywhere. Mining will not solve the country’s problems currently, but infrastructure can.
There is a need to manage demands in the country and have a more structured direction for investment and resources. The country had some of the most promising economic moments. In fact, the country has also had a sizable economic boom, which are things that do not happen every time. Despite these booms and economic promises, the country today has very little to show for it. Therefore, more than ever, there is a need for effective resource management to avoid recession. There are some propositions for labour market reforms. However, this doesn’t seem like a proposition that will do much in terms of the economic problems faced by the country.
While Australia’s budget was designed to be able to withstand some shocks that could arise as a result of economic disruptions. However, the country’s GDP is currently at an all-time low such that it cannot withstand this shock and any disruption beyond measure can send the country into recessions. There is no indication that the GDP will grow at a fast rate. All indications point to the fact that the GDP will grow at a rather slow rate. There is also an estimation that the cash deficit will continue for a long period before it takes a new turn, even with the right policies.
Additionally, the focus of major political debates around is on debt reduction and deficit elimination. This is an important thing for the government to focus on if it must survive the economic reality that it’s currently battling with. More so, the government also has to adopt a fiscal policy that’s expansionary as advised by the OECD. The government is currently in a fix and the economy is not in great shape. As such, it is crucial to adopt policies that will salvage the situation while also shifting from mining investments.
Resources To Infrastructure Investment
There is a need for an investment shift from resources to infrastructure. Already, it is clear that there is an infrastructure gap within the country. The major aim of the government should be on policies that can achieve large-scale infrastructural success. This will go a long way in stabilising the economy and strengthening other projects. Such infrastructural investment will require strategy and quality innovative ideas.