Economic growthThe impact of the global financial crisis on economic growthDue to the global recession, Australia's GDP was expected to contract by 0.5% in 2009-10 to other advanced economies which were expected to contract by 3.75% in the same year. However modest the GDP reductions were, it was clear that Australia was not exempt from the global recession, although it is better placed and expected to perform better than almost all other OECD economies. The global recession has also triggered a decline in household wealth and a collapse in consumer confidence, with consumption forecast to contract by 0.25% in 2009-2010. Economic recovery package – use of macroeconomic policies Fiscal policy Fiscal policy, a macroeconomic policy, can influence the allocation of resources, redistribute income and reduce fluctuations in the business cycle, influencing the overall level of economic activity. The policy uses the Commonwealth Government budget to achieve the government's economic objectives, for example by altering the level of government spending and taxation, manipulating the level of economic activity and thereby influencing economic growth. In response to the global financial crisis, the Australian Labor government had implemented a budget deficit in which total government spending exceeded total revenue, with expectations of $338.2 billion in expenditure and $291 billion in revenue for 2009 -2010. Australian Government revenue and expenditure for 2009-10 can be seen below in Figure 1.1. Figure 1.1 Australian Government taxation and spending. Source: http://www.budget.gov.au/2009-10/content/overview/download/Budget_Overview. pdfFrom Figure 1.1, it is evident that since February 200...... half of the document ......Works CitedDixon, T 2009, Australia in the economy, Pearson Australia, Melbourne.http://www.budget .gov .au/2010-11/content/overview/download/Budget_Overview.pdfhttp://www.budget.gov.au/2009-10/content/overview/download/Budget_Overview.pdfhttp://www.budget.gov .au /2010-11/content/speech/download/speech.pdfhttp://www.westpac.com.au/docs/pdf/aw/economics-research/2010BudgetReport.pdfhttp://www.anz.com/resources /e /1/e1fdfb804e8f8b3a8e97ce6073e41bfe/Forecasts-20102105.pdf.pdf?CACHEID=af9ea3804e8f896cbe1dffe6f59f1df3http://www.leadingedge.com.au/news/statistics.phphttp://www.treasurer.gov.au/DisplayDo cs.aspx ?doc = australian_economy/2009/attachments/001/strength_and_resilience_transcript.htm&PageID=013&min=wmshttp://www.budget.gov.au/2009-10/content/myefo/download/MYEFO_2009-10.pdfhttp://www.abs.gov . au/http://www.alp.org.au/http://www.rba.gov.au/