Australian Economic Regions and Drivers of Australian Regional Economic Growth - Term Paper Example

Name: University: Course: Tutor: Date: AUSTRALIAN ECONOMIC REGIONS (Word Count 2033) Table of Contents Table of Contents 1 1.0Introduction 2 2.0Drivers of Australian Regional Economic Growth 2 2.1Mining 2 (a)Australian Mining History 2 (b)Case study (Land and labor as Drivers of the Economy) 3 (i)Olympic Dam, South Australia 3 2.2Tourism 5 (a)Australian Tourism 5 (b)Case study (Land as a Driver of the Economy) 6 (i)Tourism on the Gold Coast region 6 2.3Agriculture 7 (a)Agriculture in Australia 7 (b)Case study (Land as a Driver of the Economy) 8 (i)Agriculture in Western Australia 8 3.0Conclusion 9 1.0 Introduction An economic region refers to a grouping that mainly comprises of census divisions employed in the regional analysis of various economic activities. Similarly an economic region may at times entail an administrative division or a district of either a demarked territory or city which has been adequately planned. On the same note, Ottoson defines an economic region as the act of drawing a boundary demarcation around a given region with the intent of association that region with specific economic characteristics (2000). With this background this paper will objectively discuss the concept of economic regions and more specifically what makes Australian economic regions tick. In addition a focal point will be on the drivers behind Australian economic regions. 2.0 Drivers of Australian Regional Economic Growth 2.1 Mining (a) Australian Mining History Australian mining history dates back to the arrival of the Aborigines. The modern mining carried out in Australia is greatly attributable to the arrival of Europeans which lead to coal discovery (Moran, 2005). Later on gold was discovered in the vicinity of Ophir, New South Wales. It is notable that this early discovery still has major impacts on the Australian economy today because the wealth in Victoria due to Gold made Victoria the wealthiest colony and most economically well off. Over the years mining in Australia has evolved rapidly and the Australian mining sector is technologically advanced leading to an increased output and as such an overall increase in the economic growth. Australia is the leading lead, coal, zirconium and iron ore exporter. According to the Australian Bureau of Statistics (2005), mining gives into the Australian Gross Domestic Product about 5.6%. Since 1950, there has been a notable increase which was 2.6% at the time. Considering job opportunities, which is a main focal point of Gross Domestic Product and Regional Domestic Product evaluation, 80,000 Australians work directly in the mineral extraction sector. Considering the high cost of labour in Australia it has taken the efforts of the government via spending so as to deal with the aftermath of the liquidity trap and as such attracting more investors in the mining sector. By “priming the pump", the Australian government has managed to re-establish the monetary circular flow. In addition, this theory has taken toll in the Australian economy as the rate of unemployment has been put in check. It is therefore currently vivid that these measures have enabled the regional domestic product of areas in Australia where mining is practiced to increase gradually. (b) Case study (Land and labor as Drivers of the Economy) (i) Olympic Dam, South Australia The Olympic Dam in South Australia is well known for the production of silver, gold, Copper and uranium (GDMB Gesellschaft für Bergbau, Rohstoff und Umwelttechnik, & Metallurgie, 2006). BHP Billiton envisioned an expansion of the mine thus making it one of the most globally promising uranium mines. It is obvious that the Olympic Dam is naturally rich in mineral, therefore using land for purposes of mining definitely provides the Olympic Dam region with a major income source which is rent obtained from the profits. Thus, the expansion of this mine has made the region around it to develop thus further boosting economic growth. Currently, the mine employs a state of art underground mining termed the sublevel open stoping with the aid of highly productive modern mining equipment thus further boosting the economic advantage for the region. It is worth mentioning that the Olympic Dam region thanks to BHP Billiton has managed to focus its production as well as labour in mining, as a result the region is gradually reaching its maximum productive efficiency. Over the years, the Olympic Dam region has managed to continuously increase its capacity to maximize output with respect to mining as depicted by the ever increasing profits and by focusing on mining as a major income source has allowed the region to reach its maximum productive efficiency (Parkin, 2008). Employing the Keynesian Theory in an effort to fight unemployment, the Australian government has resorted to the expansion of money supply (Coleman, 2001, p. 729). This has resulted in more money with investors for instance the BHP Billiton thus increasing the overall spending in the economy, consequently more jobs have been created over the years. In addition, the expansion by BHP Billiton set to quadruple entire production has resulted in the creation of more employment for the residents thus raising their living standards. Up to the early 1980s the Australian government made significant financial contribution in terms of infrastructure in the Olympic dam mine. For instance houses and hospitals were created in the nearby towns of Woomera, Roxby Downs and Andamooka. The Australian government has put measures to ensure that the profits generated from mining are retained within the mining communities and this helps in the creation of low affordable housing, as well as the provision of education. This eventually increases the much needed labor force in the mines thus employing the utilization of labor whose reward is wages. Such facilities have equally brought about optimum production efficiency. It is notable that this has been as a result of the utilization of land as an income generating resource in the region. In addition, the creation of modern schools around the mining areas gives more room for the students to be equipped with better skills and can take up white collar jobs in the mines, thus an overall increase in the skilled labor provision in the area. 2.2 Tourism (a) Australian Tourism Tourism in Australia is an industry that has gradually developed over the years and there has been a tremendous increase in the recognition of this industry. The main reason for the rapid growth is the diverse and numerous attraction sites in Australia such as Cairns city, the Gold Coast and Whitsundays. Moreover, this industry has witnessed continuous improvement in meeting the needs of the marketplace. It is worth mentioning that this is the most diverse Australian industry because it embraces core sectors of the economy (Sinclair, 2007). Technological developments such as digital marketing have made marketing of tourism become more proficient and as such the industry is able to generate more income. On the same note, this industry plays a major role via corporate responsibility as it avails financial, technological and human resource support. With such services, the regions that serve as tourist destinations as well as attraction sites tend to contribute a lot to tourism development and overall increase in income for the region and the whole country (Lafferty & Van Fossen, 2004). Tourism in Australia has diversified the economic aspects of Australia. The incorporation of tourism in the Australian economy in the sense that it forms an essential structure of most economic institutions as it is a notable factor behind the intensification of Australia's financial system in the current years. In addition, tourism has made a significant contribution to the Australian Gross Domestic Product. Besides, this industry has created widespread employment opportunities (Severino, 2007). In an effort to support tourism, the Australian government has improved infrastructure as well as the facilities of communities that are in the vicinity of the tourist attraction site to intensify their demand to a foreign audience (Thorp, 2007). This has lead to an increase in government spending causing the output to rise thus the multiplier effect comes in focus especially because the overall output has increased. Consequently the increased government spending results in the augment of the regional domestic product as well as the productivity of the tourism region. (b) Case study (Land as a Driver of the Economy) (i) Tourism on the Gold Coast region The Gold Coast is on of the most popular Australian cities and major tourist. Through the development of tourism in the Gold Coast, land has been employed in the generation of income for the region. With respect to the multiplier effect this region has aided the Australian economy to experience an increase in the overall Gross Domestic product, due to the government’s effort in improving infrastructure in the region to attract more tourists over the years as well as proper governance practices. In addition, most of the employees reside within the vicinity of the Gold Coast region (Morris, 2004). Tourism has enabled that gold coast region to significantly improve in terms of infrastructure. For instance, The Gold Coast Hospital is one of the major teaching as well as referral hospital in Queensland. Such a facility has attracted education and additional settlement in this region. In terms of educational facilities that result in the student’s acquisition of adequate skills that are necessary include the development of the Gold Coast University hospital. In addition, transport facilities in the goals coast as a result of tourism have been improved and thus attracting more and more people to an otherwise unattractive region. For instance there is the Gold Coast Highway. All these have resulted in an overall increase in the regional domestic product of the region (Morris, 2004). Therefore, the Gold Coast region has developed due to its predominate infrastructures. These have enabled the region to obtain optimum production efficiency thus having an overall economic advantage. 2.3 Agriculture (a) Agriculture in Australia The history of agriculture in Australia dates back to the European settlement in which the wool industry was the most predominant (Sinclair, 2001). Technical and Scientific innovations have enabled Australian farmers to be among the global leaders in terms of productivity as well as efficiency resulting in a mark-able and stable increase in the regional domestic product especially in areas where farming is practiced. Agriculture in Australia contributes 2 per cent of the total gross domestic and thirty five per cent of the exports from Australia are agricultural products. More than four hundred thousand Australians are employed in the agricultural sector either directly or indirectly. With such statistics it is clear that the agricultural sector has contributed a lot to the economic growth of Australia. On the same note, the creation of the employment opportunities has led to the specific regions having an increased regional economic growth (Harchaoui, Jean & Tarkhani, 2005). The effect of the Australian government creating and enticing the local banks by frequently lowering the reserve requirement such that they have been able to lend funds to farmers, has had an overall effect of expanding the Australian money supply due to the lower multiplier effect for every Australian dollar deposited in the form of savings. So when farmers increase productivity capacity and produces more, the agricultural industry is able to employ more people and at the same time save more. Consequently, the overall result is an increase in the regional as well as gross domestic product (Roos & Russell, 2002). (b) Case study (Land as a Driver of the Economy) (i) Agriculture in Western Australia The Western state is the largest in Australia. Its location makes it experience a variety of climatic conditions that make it suitable for mixed farming. It is notable that Western Australia has agriculture as its second main export industry thus contributing significantly to the gross domestic product of Australia. The good black soil as well as fair red soils allow for diversity of agricultural production making this area have a significant contribution the employment opportunity via agriculture to the residents of this region. In addition, it has attracted a lot of people to move and settle on this region for the same reason and as such the regional domestic product in on an ever increasing rise (Taylor, n.d). With a lot of agricultural activities, the Australian government has increased the funds distributed in this region to improve on infrastructure such as road transport thus facilitating optimum production efficiency in all forms of farming carried out in the region. 3.0 Conclusion From the economic research carried out it is evident that most of the drivers of the Australian economy employ land as a main resource. Basing on theoretical analysis, agriculture, mining and Tourism, have continuously contributed to the Australian overall regional and gross domestic product due to the utilization of the best characteristics of their various location advantages and factors. 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