According to the December quarter figures, Australia’s GDP grew by 0.9 percent, bringing the yearly growth total to 2.7 percent. Comparatively, the Australian Treasury estimates claim that the world’s advanced economies as a group contracted by approximately 3.2 percent.

In a statement accompanying the release of the figures Wayne Swann, Treasurer of Australia, said that infrastructure spending, tax incentives and several other fiscal stimulus measures introduced by the Government jointly spurned growth by 0.2 percent for the December quarter. The statement went on to say that additionally to the Government’s fiscal intervention, there is evidence that the economic environment is becoming increasingly self-sustaining and stimulus measures will no longer be needed in the foreseeable future.

The December quarter’s GDP growth has been attributed to a number of positive factors, including a 0.7 percent rise in household spending; new business investment rising by 4.7 percent for the quarter; equipment investment increasing by 11 percent; public investment spending rising by 10 percent over the quarter; and investment by state and local governments growing by 13 percent. Additionally, export volumes also grew by 1.7 percent during the quarter, indicating an improvement in international economic cooperation.

The Treasurer closed his comments on the latest National Accounts by saying that the Australian economy has proved to be highly resilient over 2009, and the figures indicate that 2010 will see a broadening in the economic increases of the nation.

Photo by publik16

A total of €2,234.88 million was granted in state aid across the three surveyed countries in 2008, indicating an overall increase in grants across the countries. 98.9 percent of this amount was accounted for by aid granted by the Norwegian government.

The report shows that the primary contributions to the 2008 state aid increase were Norway’s tax relief schemes to the maritime sector and compensation to Norwegian farmers for pollution reductions. Lichtenstein increased state aid by 29 percent in 2008, all through funding of cultural and heritage projects. Between the three surveyed countries only Iceland decreased state aid in 2008, lowering their grants by 32.3% compared to 2007.

Norway provided 0.54 percent of it’s GDP in governments grants, compared to Iceland’s 0.13 percent and Liechtenstein’s 0.03 percent. The EU average for the same period was 0.42 percent of GDP. However, if crisis package aid is included in the statistics, then the level of aid granted in Norway is only a quarter of that is average for the countries of EU.

The European Free Trade Association is an intergovernmental organization set up for the promotion of free trade and economic integration to the benefit of its four member states: Iceland, Liechtenstein, Norway and Switzerland.

Photo by NHD-INFO

On December 16th, the Australian Bureau of Statistics (ABS) released the country’s National Account report for the September Quarter. The report figures show that the seasonally adjusted GDP figure rose by 0.2 percent compared to the June quarter, and 0.5 percent compared to the same quarter in 2008. The Australian Treasury estimates that the Government’s fiscal stimulus package added 0.4 percent to the September growth figure. According to Wayne Swan, Treasurer of Australia, through the Government’s ongoing support the country has continued to outperform and outgrow nearly all other developed economies. He went on to say that without a Government stimulus package, Australia would not have been able to maintain its position as one of few nations worldwide with a positive GDP figure for the year up to September.

The September National Account release shows that seasonally adjusted household consumption rose by 0.7 percent for the quarter, and 1.9 percent compared to same period in 2008. For the first time in 2009, dwelling investment rose by 0.3 percent during the quarter. Exports and imports were the largest negative contributors to GDP, with seasonally adjusted figures of -0.5 percent and -1.1 percent, respectively.

According to Wayne Swan, the National Account release clearly shows that the Australian economy is improving. Though the figures also indicate that the growth is not yet self-sustaining, and that the Government’s fiscal stimulus package remains crucial for Australia’s position as a global growth leader.

Photo by publik16

On December 8th , Sela Molisa, Finance Minister of Vanuatu, in his speech presenting 2010 national budget, announced that his country will see continued economic growth in 2010. According to the latest statistics, GDP growth in Vanuatu in 2009 had slowed to 3.8 percent, compared to 6.3 percent of growth in 2008. Although the world experienced a recession this year, the Minister assured the nation that the country’s economic growth remained positive. In relation to the 2009 budget, the Finance Minister said that a healthy operating surplus of Vt 487 million (approximately EUR 3.5 million) is expected at the end of the financial year. The recurrent revenue for 2010 is forecast to be Vt 14, 579 billion (approximately EUR 103.7 million).

Elaborating on expected growth areas, Sela Molisa stated “consistent with the news that global economic conditions are strengthening, growth in almost all components of the [Vanuatu]service sector is projected ”.

The Republic of Vanuatu is a tiny South-Pacific island nation, which, starting from 1971 has provided international services, through the specially created Vanuatu Offshore Financial Center. In recent decades, the country developed into one of the most recognizable offshore centers specializing in tax-exempt international companies registration, maritime fleet registration, and banking and insurance services. Vanuatu currently has no direct taxes, and has no signed Tax Information Exchange Agreements and no Double Taxation Agreements with any other jurisdiction. According to the Organization of Economic Co-operation and Development (OECD), Vanuatu is a jurisdictions which has committed to the internationally agreed tax standards, but has not yet substantially implemented them (a so-called “grey list” country).

Photo by CW Ye

According to the OECD’s “Revenue Statistics: 2009 Edition” report, published November 24th, the tax burden by its members has fallen as the worldwide financial crisis tolls global economies. The aggregate tax receipt-to-GDP ratio across the surveyed OECD nations in both 2007 and 2006 was 35.8%. Based on current provisional figures, this ratio has now fallen to an approximate 35.2% or 35.3%.

Mexico displayed the lowest tax burden with 21.1%, followed by Turkey and Korea at 23.5% and 26.6%, respectively. Denmark was ranked as the highest tax receipt to GDP ratio nation at 48.3%, Sweden and Belgium ranked second and third with 47.1% and 44.3%. The United Kingdom reported a figure of 35.7%, and the US is facing 26.9%. Based on the 2008 provisional figures, Iceland experienced the biggest year to year drop of 4.8%, and Mexico saw the highest rise with 3.1%. Australia, Japan, Netherlands and Poland did not provide provisional 2008 figures in time for the publication.

According to an OECD publication accompanying the “Revenue Statistics: 2009 Edition” report, the tax receipts of a nation typically fall proportionately more than GDP in times of recession. The current climate of government tax cuts aimed at boosting economic growth, only serves to accentuate this tax receipt-to-GDP fall.

Commenting on the findings Angel Gurría, OECD Secretary-General, said “Governments acted decisively in 2008 and 2009 to support demand during the crisis … but falling tax receipts underline the challenge they will face, once the recovery is secured, in maintaining sound public finances”.

The OECD has made available the “Revenue Statistics: 2009 Edition” report and the accompanying tax burden publication.