5.2 Fiscal and Monetary policy to improve living standards

Question 1

what is the fiscal policy and who controls it

Answer 1

The fiscal policy is used to adjust the economy to a desired level where prices are steady, the employment level is satisfactory and there is potential growth. ​The Australian government controls the fiscal policy

Usually implemented when the economy is slow moving or moving too fast.

Question 2

what is the monetary policy and who controls it?

Answer 2

The monetary policy encourages strong and sustainable growth in an economy. It aims to control inflation, preserve the value of money, manage interest rates and the total supply of money circulating in the economy. The reserve bank

Question 3

summarise taxation

Answer 3

Individuals and businesses are required to pay tax, such as:​

GST (Goods and Services Tax)​

Income Tax​

Medicare Levy (funds the National Disability Insurance Scheme)​

Tax can improve living standards through the provision of hospitals, education, transport, pensions, grants, etc. ​

The progressive tax system is designed to reduce wealth differences by applying high tax rates to high income earners.

Question 4

summarise workforce development

Answer 4

Highly skilled and flexible workers can improve Australia’s productivity and international competitiveness, along with maintain current living standards.​

​

These workers are a result of public sector schools, TAFE colleges and universities, which are funded by the federal and state government.

Question 5

summarise visas and migration

Answer 5

If there is a skill shortfall in the Australian workforce, the federal government will make various visas / programs available to source additional workers from overseas.

The skilled migration program is one scheme offered by the government. ​

Targets potential immigrants with skills and abilities that will contribute to the Australian economy. ​

This program is permanent – the immigrant can permanently live in Australia.