Australia's Primary, Secondary and Tertiary Industry

There are three industries that contribute to Australia's economy. All production activities in the country can be classified as primary, secondary, or tertiary. Nonetheless, primary production is Australia's biggest industry. It contributes significantly to the country's GDP and accounts for a significant fraction of overall exports. Many individuals work in primary industries, which primarily produce raw materials that can be utilized to create finished items or consumed as the final result. One of the significant primary industries in Australia is mining. It forms a major component of the export sector of the nation. It also offers employment opportunities to many people. Other primary industries include agricultural, food, fisheries and forestry. However, although the primary industry is leading in Australia, it does not contribute to a significant economic growth (Lenzen 2003, p.33). It is because it is faced with various challenges which hinder it from making a high contribution to the economy.

Overdependence on primary industry leads to the depletion of the natural resources in the country. It implies that in future time, the nation may not have enough natural resources to sustain the economy due to depletion. Moreover, the demand for primary products in the foreign markets is very low. It involves that most of the output of the primary industries in Australia is consumed domestically. It is a blow to the economy because foreign trade is very essential for economic growth and development of any nation. In case the primary products get their way to international markets, they are sold at a very poor price as their demand is low (Butlin 2013, p.67).

The prices of primary products in the international markets are very low. Hence, the producers are not compensated for their efforts. After being processed into finished products by other nations, the final commodities are imported into the country at a very high price. It implies that in most cases, other countries are the ones who benefit from the raw materials produced in the primary industries in Australia (Peters et al. 2010, p.1330). The government of Australia should improve its manufacturing industry so that it can process raw materials domestically and export the finished products. It will enable the country to benefit from its primary industry more than it could when exporting the raw commodities.

Secondary Industry

Despite the fact that primary production is the largest industry in Australia, manufacturing which is a secondary industry plays a crucial role in the economy. Manufacture of food and beverages forms a big portion of the secondary industry in Australia. It contributes a significant percentage to the gross domestic product. Other secondary industries in the country include textile, clothing and foot ware, and the motor vehicle industry. Most of these sectors utilize the available raw materials while others import them from other nations. The manufacturing industry is not well-developed in Australia. The reason for it is that most of the companies in the sector produce commodities which are mostly consumed domestically (Dodgson, Hughes, Foster and Metcalfe 2011, p.1152).

Since the industry is not well-developed, the demand for the products is low in the foreign market. An example is the food and beverage industry whose products are of low quality and majorly consumed locally. It is because many countries which participate in the foreign market produce enough of the same product domestically. Hence, they do not need to import them. It implies that when the food and beverage products get their way to the international market, they are sold at a low price which is a blow to the economy of Australia. Other manufacturing industries like the textile, clothing, and foot ware face stiff competition in the international market. It is because many countries avail the same commodity of varying qualities to the market which in turn leads to the competition among these products (Horridge, Parmenter and Pearson 2000, p.98). The government of Australia should invest more in the manufacturing industry which has the highest potential of boosting the economy.

The manufacturing industry is very crucial to the economy of any nation. It is because it utilizes the domestic raw materials and produces goods of a higher quality which can secure a place in the international markets. The finished products after manufacturing are sold at a higher price compared to the raw materials which are exported in the primary industry. Secondary industries save the country the money they could have utilized to purchase the finished products from other nations and use for other development purposes of the nation. Manufacturing also protects the young industries in the country from the stiff competition they may face from the imports from other nations thus leading to the growth of the sector (Toner 2000, p.18).

The manufacturing process involves many activities including getting the raw materials from the source. All these stages in production require human power for them to be accomplished. It implies that manufacturing industry offers employment opportunities to many people in the country. It helps reduce the rate of unemployment in Australia which is an indicator of under development. When people in the country are employed, more revenue is collected in the form of income tax from the residents. It is a clear indication that the manufacturing industry is very critical to any economy. Thus, Australia should support higher manufacturing capacity.

The manufacturing industry in Australia has declined in the past period. It has been caused by many factors both domestic and external. One of the major causes of the decrease in the Australian manufacturing industry is the high value of its dollar which makes it difficult for local producers to compete in the foreign market. As a result of the high prices of the domestically produced manufactured products, consumers opt to purchase the cheap imports brought in to the country. It is a blow to the domestic producers, because their products do not get market in the country. The drop in the manufacturing industry also affects the economy of Australian that it increases the rate of unemployment because people end up losing their jobs (Connolly and Lewis 2010, p.6). Low employment rate means that there are reduced revenues in the form of income tax collected from the citizens of the nation.

As a result of the stiff competition in the international markets and the unfavourable condition of operations in Australia, many industries have decided to cease their activities. The most affected are the vehicle manufacturing industry where many companies have threatened to close doing their businesses. Another factor which has dramatically affected the manufacturing industry in Australia is the long-standing unfavourable policies formulated by the agencies which control the economy of the country. These organizations are the ones who formulate economic policies which guide the economy. In case there are disagreements, the economy is adversely affected especially the production industry.

Tertiary Industry

The Australian economy also consists of the tertiary industry. It is mainly concerned with the provision of services to other businesses and the final consumers. This industry majorly depends on skills and professionalism which the service providers use to achieve their targets (Coutts and Roberts 2011, p.16). One of the major components of the tertiary industry in Australia is the financial institutions which are very important to the economy. They ensure circulation of money in the economy through borrowing and lending. Financial institutions facilitate investment in the country because they create a link among the savers and borrowers.

The service industry in Australia is also composed of training institutions especially colleges and universities. In the recent past, the government of Australia has invested a lot in university education. It has been enhanced by the demand for qualified personnel to offer services domestically. Australia is now able to produce adequate staff to provide services to domestic consumers. It has saved the country the money it would use to import human power from other nations especially in the health sector. Since the manufacturing industries require qualified personnel to carry out the tasks in the industry, it is able to utilize the professional services offered by the service industry (Sharma 2004, p.1727). It implies that manufacturing sector is very crucial to the service industry because it depends a lot on its services.

Therefore, the secondary industry in any nation is very crucial. It is because it is beneficial to other industries in the country. It makes use of the raw materials produced in the primary market for processing. Thus, it is a potential market for the output of the primary industry. The manufacturing sector also requires qualified personnel to control it. It implies that it utilizes the skills provided by the service industry including financial management. Hence, Australia should support greater manufacturing capacity to boost all the other industries in the country (Koren 2010, p.89).

The Reasons why the Government of Australia Should Invest More in the Secondary Industry

Based on the comparison of the primary, secondary and tertiary industries in Australia, there have been concerns on whether the country should support a more significant manufacturing capacity. In my view, there are various reasons why the government of Australia should invest more in the secondary industry. The first argument to support greater manufacturing capacity in Australia is the importance the secondary industry has to the economy of the nation.

The manufacturing industry in Australia contributes a great percentage to the gross domestic product of the country. It is because most of the output of the industry is sold in the international market earning the country foreign exchange. The prices in the overseas markets are high hence more revenue is realized from the industry. It is evident because following the decline in the production as a result of increase in the value of its currency, the GDP of the country has greatly declined (Davis, Evans and Hickey 2006, p.240). It has been caused by the small contribution of the manufacturing industry to the GDP.

The manufacturing industry also contributes a lot to the revenue collected by the government in the form of taxes. It is because all the companies in the sector should pay corporate tax to the state. Since the industry also offers employment opportunities to many people, they pay income taxes to the government. The rate of unemployment is very critical to any economy. A high number of unemployed people in a nation indicate a low level of economic development. The manufacturing sector in Australia should be enhanced, because it offers employment opportunities to many people in the nation. It helps reduce the rate of unemployment in the country which negatively affects the economy (Beers, Bossilkov, Corder, and Berkel 2007, p.62). Following the significant contribution of the manufacturing industry to the economy, the government of Australia should support a greater manufacturing capacity.

Another argument to support a greater manufacturing capacity in Australia is that it utilizes the natural resources of the country. The manufacturing industry mostly makes use of the available raw materials which could otherwise remain unutilized. It also ensures that the resources which could not be used when raw are beneficial to the citizens and the country as a whole (Madden, Scaife and Crissman 2006, p.55). The availability of unutilized resources in a nation is an indicator of underdevelopment because it shows that the state is not able to maximize the available wealth.

The manufacturing industry in Australia supports both the primary and tertiary industries and contributes to their prosperity. Firstly, it makes use of the raw materials produced by the primary sector in their production processes. Since the primary industry is concerned with the extraction of natural resources, it acts as a source of raw materials to the manufacturing sector. It implies that the secondary industry is a potential market to the primary one. Encouraging a greater production capacity in Australia will facilitate the improvement in the primary sector. It is because it will create a ready market for its output hence stimulating more production (Appelbaum 2000, p.132).

The production process in the manufacturing industry utilizes human labour. It involves that it requires qualified personnel to perform the tasks in the sector. Following the improvement in technology in Australia and across the world, many processing companies have employed the use of machines to increase the level of output and its quality. The operation of the devices requires qualified personnel which can only be produced by the tertiary industry which offers services. It implies that the manufacturing industry utilizes the services provided by tertiary sector hence creating a market for them (Tybout 2000, p.28). It is a clear indication of how the manufacturing industry is crucial to the service sector. Therefore, the manufacturing industry is essential both to the economy and other industries in Australia. Thus, it should be improved.

To sum up, the question of whether Australia should support a greater production capacity is very important. It is because the economic growth of the country has decreased in the recent past. One of the major contributors to the decline in the economy is the depreciation of the secondary industry which was caused by many factors. Addressing this question will provide a solution to the problems being faced by the country. Conducting an analysis on whether Australia should support greater production capacity or not will act as a solution to the economic problems being faced by the country.


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Beers, D., Bossilkov, A., Corder, G. and Berkel, R., 2007. Industrial symbiosis in the Australian minerals industry: The cases of Kwinana and Gladstone. Journal of Industrial Ecology, 11(1), pp. 55-72.

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Madden, K., Scaife, W. and Crissman, K., 2006. How and why small to medium size enterprises (SMEs) engage with their communities: An Australian study. International Journal of Nonprofit and Voluntary Sector Marketing, 11(1), pp. 49-60.

Peters, G.M., et al., 2010. Red meat production in Australia: Life cycle assessment and comparison with overseas studies. Environmental science & technology, 44(4), pp. 1327-1332.

Sharma, K., 2004. Horizontal and vertical intra-industry trade in Australian manufacturing: Does trade liberalization have any impact? Applied Economics, 36(15), pp. 1723-1730.

Toner, Ph., 2000. Manufacturing industry in the Australian economy: Its role and significance [An earlier version of these arguments appeared in Toner, Ph. and Green, R., 1999, NSW Government industry policy: A submission to the MSU parliamentary accounts committee inquiry into assistance to NSW industry]. Journal of Australian Political Economy, 45, p. 18-45.

Tybout, J.R., 2000. Manufacturing firms in developing countries: How well do they do, and why? Journal of Economic literature, 38(1), pp. 11-44.

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