Australia is highly dependent on its natural resources;
therefore it needs to develop a national accounting system whereby the
concept of natural resource asset depletion is incorporated into its
national income accounts. The present study suggests that if the
national income accounting system of the economy is deficient in
highlighting the gap in estimated income and sustainable income, then
such a system needs to be improved [Ahmed and Mallick (1997)]. In a
previous analysis of the Australian economy [Mallick, Sinden, and
Thampapillai (2000)], showed that reconciliation between the goals of
sustainability and employment may be achieved by a real wage reduction
of approximately 8-10 percent. The analysis was structured within the
framework of a simple Keynesian model of income determination and a
Cobb-Douglas production function.