Economics management assignment essay report writing help on: Economic policy

IntroductionThis report gives the overview about the impact of the government economic policy and other aspects of economic environment on the personal finance of the New Zealand. The basic element of the personal finance is financial planning which requires constant reevaluation and monitoring. Generally personal finance contains five steps such as assessment, setting goals, creation of plan, execution and re-assessment. The purpose of the Government Economic Policy is to attain balanced, robust and sustainable growth which is more communicated throughout the industries and country. Taxation is considered as the part of economic policy, because after deduction of taxes people are left with disposable incomes and they decide how much to spend and save. On the other side GST is also considered as the part of economic policy because it decides how much the individuals are required to pay GST on goods and services.  At last, aspects of economic environment have been mentioned such as Economic Growth and Sustainable Macro Environment.

Personal FinanceIt can be said that Personal finance is considered as application of finance principles to monetary actions of the family or individual unit. It is very clear that government economic policy and other aspects of economic environment have a considerable impact on personal finances of the New Zealand people. It focuses the paths in which families or individuals obtain, save, budget and use monetary resources throughout the time and taking into consideration several upcoming life events and financial risks (Kwok, Milevsky, & Robinson, 1994).  Elements of the personal finance may include savings and checking accounts, consumer loans, credit cards, investments in stock market, plans of retirement, policies of insurance and management of income tax.  The objective of the Government economic policy is to accomplish robust, balanced and sustainable growth which is more communicated throughout the country and among industries (Kwok, Milevsky, & Robinson, 1994). Creation of lasting prosperity needs the economy to rebalance and change from the public spending towards the investment of private sector and net trade. A basic element of the personal finance is the financial planning that is the dynamic process which needs regular reevaluation and monitoring. It is viewed that personal finance has 5 steps:

Assessment: One personal situation of the finance may be evaluated by mixing simplified versions of the financial income statements and balance sheets. It is very clear that personal kind of balance sheet contains the personal assets values along with personal liabilities values.Setting goals: Retiring at the age of 65 with the personal net worth of around 1000000 and buying the house in three years whereas paying the monthly servicing cost which is no more than 25% of gross income (Brocaglia, 2007).  Setting of the financial goals helps in directing financial planning. Setting of the goal is accomplished with the objective to fulfill various financial requirements.

Creation of plan: It can be said that creation of plan considers various things such as minimization of unnecessary expenses and investing in the stock market.

Execution: Implementation of the financial plan needs perseverance and discipline. Several people receive help from professionals like financial planners, lawyers, investment advisers and accountants.

Reassessment and Monitoring: One’s financial plan should be controlled for potential reassessments or adjustments.

 Economic PolicyThe New Zealand Economy is the market economy that is highly relied on global trade primarily with European Union, United States, Australia, Japan and China. It can be said that economy of New Zealand has high tech and small manufacturing sectors being robustly concentrated on primary and tourism industries like agriculture. Economic Policy can be implemented with the help of taxation, interest rates of Reserve Bank, monopoly and price controls, export and import licensing. In mid of 1970s, the government started the program of industrial restructuring focused on several industries like footwear, electronics, automobiles and textiles whose local prices were higher in comparison to foreign substitutes with objective of minimizing the protection related products (Son, 2011).  In year 2002, first contribution was made to the fund of NZS equal to 0.5% of the GDP. By year 2007, it is predicted that with the mixture of the contributions to NZS and the return on its investment, accumulated asset shall have risen to approx 8% of the GDP. Fiscal policy permits automatic fiscal stabilizer to work during the downturns and upturns in the economy. The main purpose of the economic policy of the Government is to build the conditions through which sustainable rate of economic growth of New Zealand rises and creating it back in half of OECD in per capita income terms (Bosworth & Collins, 2003).  The major barriers to the economic development of the New Zealand are greatly external comprising the vulnerability to geopolitical and economic shocks in the world.

Taxation

During the year 2010, New Zealand was the second –lowest burden of personal tax in OECD, after taking into consideration all compulsory effects of tax-take. There is a continuous political debate among right –leaning and left –leaning political parties, whether lowering of the taxes are sufficient or not (Bosworth & Collins, 2003).  Taxation has a major impact on the personal finance of the people because, after taxation people are left with their disposable income. With the help of disposable income, people are able to decide how much to spend and how much to save. Greater percentage of the taxation worries the people about how to spend the remaining income on the daily expenditures (Devereux, 2009).GST

Nearly all services and goods supplied in region of New Zealand are required to give GST, excluding rental service of the financial services and residential property. If the visitor or tourist buys any services and goods from New Zealand, then he is required to pay GST Tax that is comprised in price of the services and goods. Generally, the visitors may not get back the amount of the tax. GST is considered as a part of economic policy because all purchasers of goods and services are required to pay GST.

Aspects of the Economic Environment

Economic Growth

Economic Growth can be considered as the most basic indicator of the economy health. In other words, it is considered as the rate through which the income of the nation is rising.  It has been examined that economic growth was high in 2001 because of the least value of New Zealand Dollar and made the exports competitive (Boskin, 2008).  It is computed by the yearly percentage change in GDP- market value of all services and goods produced by the country in the certain period of time. In fact, treasury has unique capability to offer the overall overview on the economic growth by containing analysis of microeconomics, macroeconomics, institutions and economy as the system, supported by contribution of government agencies (Blomquist, 2008).  Such constant monitoring performance of the economy assists the treasury to fill the main roles- recommends the Government on considerable economy –related issues which matter most for the economic performance of the New Zealand. Economic Growth helps in knowing the nations income. Total employment views the no. of extra jobs made by the economic growth. This is considered as most famous measure of the economic effect, because it’s simpler to understand in comparison to large figures of abstract dollar. Economic growth helps in deciding the income of the New Zealand people. It could be stated that income impacts the personal finance of the people.

Sustainable Macro- economic Environment

It is viewed that other outcomes of Treasury are enhanced economic performance and high performing sector which supports International Competitiveness of New Zealand. A sustainable economy is the mandatory precondition for the growth (Gerochi, 2002).  It permits business, Government and Individuals to plan efficiently for future, enhances investment and assists to increase productivity. Usually countries which maintain constant macroeconomic variables like interest rates, inflation, unemployment, balance of the payments and the fiscal aggregates are required to show higher rates of long period growth. This is also the aspect of the economic environment which impacts the personal finance of the New Zealand People.Conclusion

At last, it can be concluded that Government economic policy and other aspects of the economic environment have a considerable impact on the personal finance of the New Zealand. Both taxation and GST have a significant consequence on the personal finances of the New Zealand people. At last aspects of economic environment such as Economic Growth and Sustainable Macro Environment have been mentioned and their consequence on the personal finance of the people.

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