History Economics Essay

HISTORY ECONOMICS ESSAY

During the period 1950 to 1990, Australia experienced many changing economic circumstances. Throughout the eras of the Menzies, Whitlam and Fraser, and Hawke and Keating Governments, many economic strategies were introduced in order to improve Australia's failing economy. The main economic factors involved were mining and manufacturing, unemployment and inflation and the issues involving wages and prices. Through the Australia government's attempts to strengthen the economy, the outcomes lead to both cohesive and divisive impacts on the Australian society.

PARAGRAPH 1 - Menzies Era 49-66

During the Menzies era of 1949 - 66 there was a major boom within Australia's economy, this was referred to as the 'Long Boom'. This period of substantial economic growth was based on the development of proven or newly discovered mineral and power resources, a rapid increase in the labour supply augmented by immigration, and a high level of capital formation (Dennis 1999). The most significant growth of this period was seen in the mining and manufacturing industries. Australia's mining industry grew rapidly and for the first time in its history Australia became a major exporter of minerals as more minerals such as iron ore were discovered therefore creating more foreign trade. Along with this there was an increase in manufacturing (particularly in the agricultural sector) due to higher demand, this at first was positive, but as demand increased this resulted in higher prices and higher wages, causing a dangerous inflation. These economic circumstances had both a fairly cohesive and divisive impact on the Australian nation. The beginning of this era can be considered cohesive as the 'boom' of the economy had a positive effect on society, resulting in greater manufacturing of goods and higher wages. This then followed in inflation as the levels of demand and prices of goods and services increase, causing a divisive effect on Australia's society due to this having a positive effect of agricultural workers through higher wages and a negative of other citizens through higher prices.

PARAGRAPH 2 - Whitlam and Fraser - 72 - 83

From 1972 to 83, the period in which Whitlam followed by Fraser led Australia; there was a major struggle in Australia's economy. The Whitlam government came into power during a worldwide recession. This caused lower prices for exports and reduced markets for Australian goods (Dennis 1999). Inflation started to increase during 1973 and the government insisted that they did not have the powers to curb this. This issue of inflation continued to have a divisive effect. The Whitlam government held a referendum in December 1973 in order to obtain control over incomes and prices, this was unsuccessful and inflation continued to increase. Inflation reached 17% in 1974 and the economy