How Foreign Policy Can Affect your Financial Situation in Australia

There are an immense number of influences, on both a domestic and international scale, that will impact your financial situation - from the performance of the global economy as a whole, to factors like foreign direct investment and the foreign demand for exports. The extent to which these influences impact your personal finances will largely depend on foreign policy. 

There are many ways in which foreign policy has the potential to affect the Australian economy, and your financial situation as a result - consider the impacts of the negotiation of deals with major trade partners in regard to commodities, or the supply of Australian tertiary education. Evidently, there are various ways in which foreign policy can influence spending and saving habits within Australia.

Regardless of whether you are always travelling or are an Australian resident who has never left the country, foreign policy can impact your financial situation. This is a fact that is often perceived by many as surprising, however there are various linking factors that reinforce the wide reaching influence of foreign policy - particularly given its increasingly important nature. 

Firstly, Australia’s foreign policy has a direct and significant impact on the country from an economic standpoint. Take the COVID-19 pandemic as an example, where government policy (both Australian and international) and availability surrounding the Australian tourism industry have had a significant impact. Borders have been closed on a state and national level, and tourists are no longer able to visit the country. The result is the unemployment of thousands - in addition to impacting surrounding industries (e.g. hospitality, entertainment), businesses have been forced to close, assets have been left unused, and ultimately this lack of demand has contributed to the first Australian economic recession in almost 30 years. 

A particular area in which the impact of foreign policy is significantly felt is in regard to migration. Not only can foreign policy impact the experience that migrants have, but these impacts on immigration will ultimately affect the rest of the Australian population to some extent as well. 

Australia has a relatively high migrant population in comparison to other OECD countries. In the recent past, foreign policy continued a trend of managed migration in the interest of economic competitiveness. This approach is useful in providing increased competition within skills of workers, but also increased competitiveness of Australia as a country, with a more effective and efficient labour market. Given the recession, unemployment and increased barriers of travel caused by COVID-19, this trend has been hindered - particularly as it is harder to argue that immigration will address skills and labour market shortages (but also due to travel restrictions and other factors). 

More generally speaking, foreign policy can significantly impact migration as it determines the number of migrants, and the criteria that decides who these migrants are. With an increase in skilled migration, there will be economic impacts surrounding the job market and the supply for certain skills. 

In minimising the impact to which foreign events such as COVID-19 can impact migration and the process that migrants undertake, there are a number of steps migrants should take surrounding their arrival into Australia. 

Firstly, migrants should take control of their personal financial situation - there are a number of products suited to the position of a migrant that can provide unique advantages, and make the overall process easier. A good example of this is a Westpac Choice Account for migrants, aimed specifically at new arrivals within Australia - read more to learn about the benefits unique to a card like this. Other important financial steps to take include ensuring that work (and thus an income) can be obtained, applying for a tax file number, and confirming that the appropriate visa has been acquired in order to be able to complete this work. 

In addition to steps regarding their financial situation, migrants should get other initial tasks out of the way - applying for a drivers licence, enrolling children in school, and ensuring that their living situation has been sorted out (amongst other things).