History of Australian economy

Answer 1

1788-1820

The first years of the colony were very neglected and barely survived.

1820-1850

The economic demand of this time was based on rural commodities (wool) which was in high demand from countries such as the UK.

1850-1860

This was the beginning of the Gold Rush Era and subsequently led to huge a huge economic boom with a large influx of migrants.

1860-1875

The Australian economy was still reaping the benefits of the Gold Rush Era and so construction and manufacturing industries continued to fare well.

Opening of Australia's first Stock Exchange.

1875-1880

As fertile land became less available to settlers, pastoral industries continued to increase their land holdings for the use of wool production. This caused a retraction in returns on investment by pastoral companies. Even when poorer land was utilized for the purpose of wool production there was continued investment both from private backers, and governments (in the form of transportation infrastructure).

1880-1890

An investment boom in Australia in this decade saw increased economic expansion despite the fact that the investments were providing less of a return. This can be attributed to foreign funds' becoming more available to Australia. This influx of capital led to Australians' experiencing the highest per capita incomes in the world during the late nineteenth century.

However, by the end of the decade 1880-1890, overseas investors became more concerned with the difference between expected returns and actual returns on Australian investment and withdrew further funding. Consequently Australia saw the start of a severe depression starting in 1890. Australian economic historian Noel Butlin would later argue that the history of Australian settlement has been one of growth financed by foreign capital, punctuated by depression caused by balance of payments crises after a collapse in property prices and exacerbated by the imprudent use of capital.

1890-1900

This decade saw economic hardship and was a time like no other in Australian history. The Great Australian Shearers Strike broke out twice in this decade and brought Queensland to the brink of civil war with attacks on ferry services and government forces common.

The Broken Hill Strike.

The Great Maritime Strike

1893- Australian banking crisis of 1893: the Federal Bank collapses; many financial institutions, including several major ones, suspend trading

• 1 May 1893- Government of Victoria implements a five-day bank holiday to address the panic

1900-1939

While wool-growing remained at the centre of economic activity, a variety of new goods such as wheat, dairy and other agriculturally based produce became a part of the Australian export repertoire. It was in this period that the latter started contributing more to economic growth than wool production. Part of this emergence of other sources of economic expansion came from technological progress, such as disease-resistant wheat and refrigerated shipping. It was also the development of this technology that renewed large-scale foreign investment.

This injection of foreign investment led to increases in construction, particularly in the private residential sector. The fact that this injection of foreign cash was the main contributor to economic expansion was again troublesome for Australia's economy. Returns on investments, as before, were immensely different from expected returns.

By the 1920s agricultural producers were experiencing profit troubles and governments, who invested heavily on transportation infrastructure, were not getting the returns they expected. Cutbacks in borrowing, government and private expenditure in the late 1920s led to a recession. The recession itself became worse as internationally nations fell into depressions which not only cut back on foreign investments to Australia, but also led to a lower demand for Australian exports. This culminated into the biggest recession in Australia's history which peaked in 1931-1932.

The recession was not felt as badly in Australia as compared to its international counterparts, due to the increases in productivity from the manufacturing sector. (In William Sinclair [1]'s terms [2], this is where Australia moved from the old model to the new model.) Trade protection, particularly from tariffs implemented by governments at the time were instrumental to the prosperity of the manufacturing sector.

1939-1974

The highest growth in the manufacturing sector was found in the period after the end of the Second World War. Import restrictions implemented by the government of the time led to increased profits to the manufacturing industry, which encompassed a wide range of industries including motor vehicles, metal processing, TCF (textiles, clothing and footwear) and chemicals. The impetus, for the most part, was U.S. investment in Australia. The manufacturing industry was bolstered only to serve the domestic market, led by economic policy makers who implemented "import replacement" strategies. This was afforded by continuing increases in both productivity and economic protection.

• 1955 Australia begins exporting coal to Japan. Japan soon becomes a major destination for Australian exports of raw minerals and agricultural products.

In the 1950s and 1960s, Australian manufacturers who were nurtured by government policy failed to increase productivity. This was highlighted by the increases in the productivity of overseas manufacturing which did not have the same level of protection as Australian producers. Foreign investors noticed this lack of competitiveness and investment declined in the manufacturing sector.

• 1967 Britain begins negotiations to enter the European Economic Community. Australia's privileged access to the British market begins to end.

Economic growth was not hampered by this, as the development of mining initiatives to exploit Australia's Natural Resources attracted foreign investment, which underpinned economic expansion. This establishment of a mining industry continued the high level of economic growth in the post-war period.

• 1974 was the end of the "long boom".

1974-2007

The Australian Stock Exchange Limited (ASX) was formed in 1987 through the amalgamation of six independent stock exchanges that formerly operated in the state capitals. Each of those exchanges had a history of share trading dating back to the 19th century.

Deregulation of the Australian economy started under the Hawke Labor government. Tariffs were progressively cut, the Australian dollar was floated in 1983 and government run enterprises from the Commonwealth Serum Laboratories to Qantas were privatised. The Howard government continued with even more controversial reforms, including establishing a Goods and Services Tax and deregulating labor markets.

The 1980s economic reforms, intended to diversify the national economy and make it more resilient, were introduced after the mid-1980s decline in the terms of trade.

YearGross Domestic ProductUS Dollar ExchangeInflation Index (2000=100)1980140,9870.87 Australian Dollars361985245,5961.42 Australian Dollars541990407,3071.27 Australian Dollars801995500,4581.34 Australian Dollars902000669,7791.71 Australian Dollars1002005926,8801.30 Australian Dollars11620071,044,1621.26 Australian Dollars122

2007-present

The GFC which hit world economies caused contraction in Australian industries and manufacturing areas however the economy overrall did not go into recession.

I hope this helps you!!