Discuss the influences of globalisation on Australia and evaluate the strategies used for
economic growth and development.
Globalisation is a reference to the growing interdependence between the world's economies
and is brought about through the deregulation of artificial barriers to cross-border trade of
goods, technology, finance, and labour. Globalisation has led to rapid economic growth and
development in many nations. Economic growth occurs when there is an increase in the total
output of a nation in one year and is measured through GDP (gross domestic product) while
economic development refers to the change and improvement in living standards within
economies and is usually measured using the HDI (human development index). Australia's
economic growth and development has been derived from trade liberalisation, sustaining the
environment and through the implementation of social security payments which are all
indicators of globalisation.
Globalisation has allowed to broaden trade and investment partners in Australia as it has
encouraged trade through the implementation of FTA's. Free trade agreements have allowed
for freer trade between nations over time. Australia's engagement in FTA's such as ChAFTA.
The China - Australia Free Trade Agreement was enforced on the 20th of December 2015 and
has benefited Australia greatly since. The agreement has enabled Australia to enhance
competitive position in the Chinese market, boosting economic growth and creating jobs.
Within the first nine months since ChAFTA, Australia benefited from the 61% growth is the
export of bottled wine which brought in 498 million Australian dollars, export of skincare
products rose by 48%, generating 30.7 million Australian dollars and the export lead increased
by 15 times to generate 434 million Australian dollars. Australia's participation in this trade
agreement has allowed for 85% of Australian goods exports to enter China tariff-free. The
implementation of this trade agreement also meant that the 3% coal tariff and the 6% tariff on
thermal coals that were imposed on Australia was expected to be phased out, thus allowing
Australia to access the Chinese freely. Furthermore, tariffs on dairy products which rose as
high as 20% in 2012 was abolished as a result of the FTA and Australian beef farmers also
gained from the removal of tariffs ranging from 12-25% prior to the agreement. As a result of
the agreements which were derived by globalisation, Australia was able to trade more freely
with other economies and see significant economic growth.
The environmental impacts of globalisation on Australia are substantially negative. The effect
of pollution on the environment is increasingly negative. An increase in manufacturing and
productions in factories also increases the gases exerted into the air. Australia’s greenhouse
gases are some of the worst in the world and
factories and production lines are major reason for
this. However, primary industries also have a
negative impact on the environment through
mining and agriculture. The methods through
which these practices pollute or damage the
environment. Additionally, the use of waterways
has increased from globalisation because of
shipping products globally as well as migrating
and touring. This extra commuting adds to the
pollutants in the water – polluting oceans globally.
Furthermore, the impact globalisation has on the Australian environment is largely negative.
In order to lessen this negative consequence of globalisation and the exponential rise in CO2
emissions in Australia, Australia has become a part of the Paris Climate Agreement in order to
tackle the rising global temperatures. Australia targets to make a 26-28% reduction in
emissions by 2030.
With rising levels of trade and investment as a result of globalisation, Australia has seen
significant economic growth. However, even though economic development results in
economic growth, economic growth does not necessarily mean economic development occurs.
While globalisation has driven up Australia GDP, in some areas, the standard of living is still
not as high. Through the implementation of social welfare payments, the government has
initiated economic development. About 2.5 million Australians receive family tax benefits.
Income support for the unemployed and the sick makes up $10.8 billion of the welfare budget
and in 2018-19, there was an increase of $358 million increase in welfare payments. According
to ABC News, Welfare payments to indigenous Australians make up $2.3 billion. The federal
government aimed to spend $500 million during 2019-20 on welfare payments alone. With
welfare payments making up 36% of the total government expenditure, millions of Australian’s
are able to improve their living standards. This implementation of a huge budget on economic
development has been possible due to the high amounts of revenue generated by the
government from the increasing levels of trade from globalisation.
In conclusion, even though globalisation has led to increasing carbon emissions which has had
negative impacts on the environment, through trade liberalisation and increasing social welfare
payment opportunities, globalisation has had an overall positive impact on Australia. In terms
of environmental sustainability, Australia’s has been incentivised by the increasing
government revenues derived from globalisation to take action and implement strategies such
as the Paris Climate agreement in order to better the environment.