Government in Australia Three Levels of Government - What are they? - What do they do? Why have 3 levels of government?
Structure of Federal Govt Governor General Senate House of Representatives
The Constitution What is it? Why have it? How can it change?
Public Sector What is it? Why have one? How is it changing?
Fiscal Policy The use of changes in government spending and taxation revenue (budget) to 1. Reallocate resources 2. Redistribute income 3. Regulate the economy (stabilisation of business cycle
Why is Fiscal Policy important? Y = C + I + G + (X-M) Therefore, Fiscal Policy has the power to regulate demand
Budget Outcome The budget is a plan of G and T Possible Outcomes 1. Balanced G = T 2. Surplus T > G 3. Deficit G > T Aim: to achieve fiscal balance, on average, over the course of the economic cycle
Fiscal Stance 1. Expansionary or loose Fiscal Policy 2. Contractionary or tight Fiscal Policy 3. Neutral – outcome remains unchanged