Territory Stories

Budget Paper 1994-95 No.6 Northern Territory Economy



Budget Paper 1994-95 No.6 Northern Territory Economy

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Tabled Paper 2156


Tabled Papers for 6th Assembly 1990 - 1994; Tabled Papers; ParliamentNT




Tabled by Barry Coulter


Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.




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Prices and Wages Real growth in wages in recent years has been achieved through increased productivity and a reduction in inflation as opposed to significant nominal wages growth. One measure o f labour productivity, non-farm GDP per person employed, increased 2.1% between December 1992 and December 1993. Labour productivity (to be distinguished from capital or technology based productivity gains) will increasingly feature in wages negotiations as enterprise-based wage agreements gain wider acceptance. Figure 4.4 plots real wages growth for the Territory and Australia over the period November 1988 to November 1993. For the Territory, growth in real wages eased over the year as nominal wage increases were held in check. Nationally, real wages g ro w th in c re a se d ov er the y ea r to November 1993, in line with productivity growth. Prices and Wages Outlook As with previous upswings, accelerating growth in the national economy has fuelled concerns o f rising inflation. While the national inflation rate can be expected to r ise as n a tio n a l eco n o m ic a c tiv ity accelerates, recent concerns over the tim in g and ra te o f in c re a se , and consequent upward pressure on interest rates, are not founded on A u stra lia s current economic conditions nor short and medium term economic prospects. Rather, expectations o f potentially rapid inflation in Australia over the short to medium term have emerged as a result o f focussing too closely on economic developments in the USA. While the USA is a significant trading partner, and movements in Australias financial markets are directly influenced by those in the USA, the American economy emerged from recession ahead o f Australia and to date has grown somewhat more strongly. The lack o f unison in terms o f the stage o f growth o f each economy provides a starting point for different inflationary outlooks for the USA and Australia. Figure 4.4 Real Average Weekly Total Earnings (annual change - quarterly) 1988 1989 1990 1991 1992 1993 Source: ABS Cat. No. 6302.0, 5206.0, 5242.0

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