Role Of Government In Mixed Economies Such As Australia...

Role of Government in Mixed Economies Such As Australia What role do governments have in modern mixed economies such as Australia? Using appropriate indicators (macro economic aggregates) outline the present state of the economy. In what ways is the Commonwealth government using fiscal and monetary policies to influence the Australian economy? What are the main features of the governments micro economic policy? Why is the government concerned about microeconomic reform? Synopsis: The role of government in Australia today has less influence on the market than they did a decade ago. It function now is to provide a stable internal and external balance under which the market can function. This is achieved through the use of fiscal,†¦show more content†¦Current fiscal policies are aimed at the medium and long-term goals of resource allocation, income distribution and external balance. This is because fiscal policy is relatively inflexible and is adjusted on an annual basis. One of the governments objectives in using fiscal policy is to reduce the Public Sector Borrowing Requirement (PSBR). To do this the government has had a $3.9bn cut in discretionary spending during the 96/97 budget. This cut may be the first of several in a bid to achieve a budget surplus. One reason behind this goal is to maintain external stability. For the past decade (except for the late 80s boom) the public debt has been on a continual rise. This was largely due to a succession of budget deficits. The result of this was a large increase in net income as a component of the current account, which in turn became a burden on the next budget. A surplus budget can be used to pay of the public debt thereby easing interest obligations. At the same time a reduction in the deficit will increase national savings. By reducing the deficit, the government does not need as much national savings in order to finance the budget. This will leave a larger pool of savings to fund investment. Although a contractionary fiscal stance will increase public saving, they may decrease private savings. Cuts in government spending to programs aimed at increasing private savings (such as Austudy) haveShow MoreRelatedRole of Government in Mixed Economies Such as Australia1768 Words   |  8 PagesRole of Government in Mixed Economies Such As Australia What role do governments have in modern mixed economies such as Australia? Using appropriate indicators (macro economic aggregates) outline the present state of the economy. In what ways is the Commonwealth government using fiscal and monetary policies to influence the Australian economy? What are the main features of the governments micro economic policy? Why is the government concerned about microeconomic reform? Synopsis: The role ofRead MoreAustralia Is A Small Open Economy1428 Words   |  6 PagesAustralia is a small open economy situated in the South Pacific with a population of 24,012,901 (ABS 2016). 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