Unit 1
Unit 2
Trade and Aid
Despite our strong earnings from exports in recent years, Australia continues to import more goods and services than we are able to export. This has important consequences for the Australian economy, and so you should gain some idea of the types of things we are importing.
Once again, we can look to the Department of Foreign Affairs and Trade for an accurate description of our trading performance. In 2008/09, our top five imports were listed as follows:
|
Major Australian Imports 2008-09 (AUD $ million) | |
|
Crude Petroleum |
$14,400 |
|
Agricultural Products |
$12,600 |
|
Passenger Motor Vehicles |
$11,600 |
|
Gold |
$11,300 |
|
Medicaments (including Veterinary) |
$7,400 |
It is here that we can start to see one of the long standing weaknesses of the Australian economy. In this country people earn relatively high wages (by world standards). In one sense this can add to living standards, but it will also mean that it is very expensive to manufacture goods and services in this country. As a result of this fact we often find that the Australian economy will export raw materials (like coal and iron ore), only to import a product that has been manufactured using these items. In total, Australians spent $159.8 billion on imported manufactured items in 2008/09.
The process of taking a raw material and changing it in some way so that it can be sold for a higher price is called value adding. Traditionally, the Australian economy has not been good at value adding. We export crude oil, but we import refined petroleum. We export iron ore, and then we import steel (a product which is made from iron ore). We export wool, and we import clothing.
The Australian economy could earn even more money from our exports if we were able to complete the value adding process here. The problem is that at the moment it is actually cheaper to send the raw materials overseas, and then buy back the finished product.
You can also see that Australia needs to import certain things in order to maintain our standard of living. The development of life-saving drugs in other countries is important for the ongoing health of people in this country. Australia maintains the strictest testing procedures in the world, and therefore importing these drugs is a safe, cost effective way of ensuring that they are available for use by people in this country.
 | Current Page: Australian Imports
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