Question

provide discussion with reference to the 2021 national budget for the following countries - Australia, New Zealand and Fiji. On the basis of covid 19 pandemic , Find out what policies and measures where used, why they were used and where it is used , whether this objectives were met and if it is affecting the economy or not .

Answer 1

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Abstract

It is a global pandemic. every country of this world is facing the issues because of COVID-19. People are staying at home and maximum part of businessess, institutions, industries and shops are closed.

Its affected all the political, economical and social activities wide level. More than 50 lacs people are Corona positive and more than 4 lacs people have lost their lives globally.

All the major microeconomic indicators like, GDP, Employment level, industrial indexes, consumer confidence etc are going down sharply. Millions of people have lost their jobs globally.

Macroeconomic Indicators-An economic indicator is a piece of economic data, usually of macroeconomic scale, that is used by analysts to interpret current or future investment possibilities.

These indicators also help to judge the overall health of an economy.

The major macroeconomic indicators are-

a). GDP growth rates.

b). The Consumer Price Index (CPI) and inflation.

c). Currency strength and stability.

d). Labor market statistics.

e). Commodity prices.

1) Policies and Measures taken by Australia to Foster Economic Growtth on the basis of Covid-19 Pandemic

1) Changes to drawdown rates

A) The Government of Autralia is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for the 2019-20 and 2020-21 income years.
B) This measure is intended to provide retirees with greater flexibility in how they manage their superannuation savings.

The key features of the Federal Government’s insolvency-related package are:

• A temporary increase in the threshold at which creditors can issue a statutory demand on a company, and the time companies have to respond to statutory demands they receive;
• A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings, an increase in the time period for debtors to respond to a bankruptcy notice, and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition

2) Agribusiness

• The Federal Government’s second announcement of economic stimulus measures has a distinct focus on supporting individuals, families and small-medium enterprises to continue to function business-as-usual wherever possible.
• In addition to those provisions already made in Tranche 1, the Tranche 2 announcements will particularly benefit recipients of the Farm Household Allowance, small-medium sized agribusinesses and employers of apprentices and trainees.

3) Customs Measures

Export

• The Australian Border Force announced the temporary prohibition on the non-commercial export of certain goods and items that contribute to controlling and preventing the spread of the coronavirus, which as of 30 March 2020, includes:
  • Disposable face masks
  • Disposable gowns
  • Disposable gloves;
  • Goggles, glasses and eye visors
  • Alcohol wipes
  • Hand Sanitizer.

2) Policies and Measures taken by New Zealand to Foster Economic Growtth on the basis of Covid-19 Pandemic

A) Economic stimulus measures

I) Reserve Bank Support

• The Reserve Bank announced an emergency policy rate cut by 75 basis points, to 0.25%. The Reserve Bank has committed to the OCR remaining at 0.25% until 2021 while asking financial institutions to be ready for a negative OCR by 1 December 2020.
• This has raised expectations that a negative OCR will occur in 2021.
• The Reserve Bank announced further measures to support commercial banks to strengthen liquidity.

II) A Small Business Cashflow Loan scheme to be administered by Inland Revenue

The key features of the loan scheme are as follows:

• Up to $100,000 to firms employing 50 or fewer full-time equivalent employees. The loan amount is calculated as $10,000 for an applicant plus $1,800 per full time employee.
• The eligibility criteria are:
  • The wage subsidy scheme criteria.
  • A declaration that the business is viable and will use the money for core business operating costs.
• The business and Inland Revenue will have a legally binding loan contract.
• The loan will be for a maximum 5 years, with repayments not due in the first 2 years.

3) Policies and Measures taken by Fiji to Foster Economic Growtth on the basis of Covid-19 Pandemic

Economic Measures can be described as stated below :

A) Fiji National Provident Fund

• Effective from 1 April 2020 to 31 December 2020 reduction in employee and employer FNPF contribution from 8 percent and 10 percent to 5 percent respectively
• Fijian workers in the hospitality sector who have lost their jobs or have had their hours cut since 1 February 2020 able to access an initial $1,000 from their FNPF accounts, with additional funds to be considered
• Employees affected by the nationwide stipulated physical distancing requirements, along with employees in the Lautoka confined area who have been placed on leave without pay or had their hours cut, able to access an initial $500 from their FNPF accounts
• Government to directly subsidise any shortfall in members balance

B) Measures taken by Reserve Bank of Fiji

• Maintain the Overnight Policy Rate at 0.25 percent
• Expand Natural Disaster and Rehabilitation Facility to include businesses affected by epidemics/ pandemics. Renamed Disaster Rehabilitation and Containment Facility
• Total allocation for facility now $60million. Businesses affected by COVID-19 can access funds under this facility through commercial banks, licenced credit institutions or FDB at a maximum interest rate of 5.0 percent

As per my advise all the policies and measures are good measure beacuse as per the economic principle increasing money supply here government has do it by the rate cut and stimulus package boost the economic growth, increase the employment level and consumer demand.

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Hope my answer have cleared all your queries, I really appreciates your positive feedback !!

Thank You !!

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