ECON1064-Quantitative Analysis

Task

The Australian Agriculture, Forestry and Fishing Support Services industry plays a significant role in the Australian economy. Recently climate change and its impacts have attracted much attention globally. Climate change poses challenges for all sectors of the Australian economy but particularly for those sectors dependent on natural resources, such as agriculture, forestry and fisheries. 

You are tasked with producing an Economic Impact Assessment of Australia’s Agriculture, Forestry and Fishing Support Services industry. In addition, you need to assess in general terms how climate change impacts in developing countries, e.g. China can impact Australia’s Agriculture, Forestry and Fishing Support Services industry in the long run

Economic impact assessment is about how one industry sector (or a project or activity within that sector) affects other sectors in the economy. Input-output tables are often used to identify relationships between sectors within an economy. 

The data required for this task can be found in the ‘Assignment Data’ Excel file1. This data consists of 32 Australian industries, including the Agriculture, Forestry and Fishing Support Services industry. The external demand (e.g. from the government, exports, etc.) of the dollar amounts for each industry is also provided.

It is expected that your report should cover: 

a) The significance of the Australian Agriculture, Forestry and Fishing Support Services industry to the Australian economy in general (note: only a discussion similar to Section 2 (including Table 1) of the KPMG report is expected).

b) Discuss the challenges the Australian Agriculture, Forestry and Fishing Support Servicesindustry faces now and the impact these challenges may have on the Australian Agriculture, Forestry and Fishing Support Services industry in the long term (note: only a discussion is expected).

c) i. Calculate and report the Type I multipliers for all 32 industries. (To equip you for calculating the technology matrix, first watch the video podcast on calculating a technology matrix for a larger economy, that is available under “Assignment help” on Canvas. Also refer to Appendix 3 for a simple explanation using a three-sector economy)3. ii. Explain the Australian Agriculture, Forestry and Fishing Support Services industry’s Type I multiplier. iii. Among the 32 industriesidentified, name two Australian industriesthat are important to the Australian Agriculture, Forestry and Fishing Support Services industry (note: use the technology matrix developed in Part C(i) to make your decisions). Discuss why you think they are important to the Australian Agriculture, Forestry and Fishing Support Services industry (note: only a discussion is expected).

d) Suppose in the latest budget that the Australian Government has declared significant cuts to the transport and support services industry and to the poultry and other livestock industry. In fact, it has decided to cut the external demand for transport and support services by 20% and for the poultry and other livestock industry by 15%. Discuss the impact of this on the Australian Agriculture, Forestry and Fishing Support Services industry. Discuss which industry (outside transport and support services and poultry and other livestock industry and Australian Agriculture, Forestry and Fishing Support Services industry) will be most heavily impacted by these budget cuts and possible reasons for why this other industry would be affected. Express the change in the other industry’s output in percentage.

e) Climate scientists say there will be winners and losers from climate change. Take China as an example and discuss in detail whether China will be a winner or loser and how this in turn will impact (positively or negatively) Australian agribusiness sector in the long run. 

f) Discuss how climate change can impact Australia’s exports in general. Outline three things you think individual Australians can do to reduce the impact of climate change in Australia.

g) Provide a brief literature review (similar to Table (2) of the KPMG Report) explaining the main findings of at least two research papers relevant to your research report. More references, where appropriate, are welcome.

h) Based on your analysis on the Australian Agriculture, Forestry and Fishing Support Services, provide recommendation(s) to the Australian government (if any).