TOPIC 6 ECO (chapter 14-16) Flashcards
industrialised countries type of eco today
dominated by clash of **capitalism & communism (US vs Soviet Union) **diff approaches to solving eco problem
common ground between nations today abt solving, approach based on operation of markets
-choices of individuals determine what g&s produced
-business determine **how **to produce g&s
completely free market eco (laissez-faire system) disadvantages
why would they all happen?
-some unsafe g&s (neg ext, undesirable)
-environment suffers irreversible harm
-some community wants & needs unsatisfied
-some ppl wont earn enough money to live
-inequalities within eco may worsen
-markets can be unstable & inefficient
markets pay attention to PRIV ECO INTERESTS, not broader social interests (market failure)
market failure
price mechanism takes account PRIVATE benefits & costs of production to consumers & producers, faiL TO ACCOUNT indirect costs (damage to enviro)
how can market failure arise
provision of g&s and income distribution
-negative externalities
-abuse of market power
-eco instability
need interests of society as WHOLE
why do gvts intervene in markets?
address market failures to achieve better aollocation of resources, more equitable distribution of income & greater eco stability
challenge for GVTs in too much market intervention
**find right balance
too much intervention stifles innovation, efficiency & growth
2 characteristics of public goods
- NON EXCLUDABLE
- NON-RIVAL
public good
good private firms dont want to supply bc cant restrict usage and benefits to those willing to pay (free riders) (clean air, street lighting public parks)
free riders
groups/individuals benefit from g/s without contributing to cost of supplying g/s.
-g/s likely under-supplied in relation to total demand
why would a free market undersupply a public good relative to demand for it/not supply
they’re non-excludable/non rival and attract free riders
-no incentive for firms to produce if consumers wont pay for them
SO GVT DOES!
what does it mean when a good is NON RIVAL
a person’s enjoyment of public good doesnt restrict others enjoymentof good
-if GVT spends money on pollution controls & enviro policies to improve air quality, valuable to everyone’s enjoyment
what other goods does gvt provide? examples
merit goods
high quality healthcare system(directly) or financial support for communities (indirectly)
demerit goods
bring harm to community eg. drugs, gambling, tobacco
gvt places restrictions
not all colelctive goods provided by gvt are public goods give example
public transport service NOT public good cause ppl gotta pay, EXCLUDABLE
Natural monopoly
market structure where goods efficiently provided by only 1 supplier bc enromous investment required to supply it
-occurs when comp creates inefficiency
-rail networks, water distribution
-gvts operate these try set fair price , not exploited
why do inequalities in income distribution from free markets widen over time?
wealth generates more wealth
-own land & assets, earn rent & interest from FOP & growht in value of investments
-greater opps developing skills & finding employment
relative poverty
those whose SOL substantially lower than average for eco, lvl income <30% of average earnings
australias most common form of poverty
relativce poverty
few in absolute poverty
absolute poverty
individuals only just enough income to enable survival (relative is compared to rest of pop)
history of welfare state
-during 20th century
from industrialised countries after depression and ww2
-grew 2nd half of century due to ageing pop, high unemployment & increase students in tertiary education
-1980s, some argued too generous, costly & created incentives to drop out of workforce
-GVTs reduce welfare benefits, obligations eg applying for jobs for incmome support, welfare benefits ofr unemployed limited, support for disabilities increase
what is the largest expense to AUS budget
redistribution of income
externalities
-form of market failure, occur when price mechanism fails to represent true social costs/benefits of production and consumption (private firms/ind)
-airlines dont consider aircraft noise when negotiating airfares
not directly affected in price mechanism
examples of negative externalities in australia
-increased carbon dioxide, contribution to global warming from burning fossil fuels
-biodiversity loss (land clearing from agriculture, mining operations)
-soil erosion & increased soil salinity (farming)
-water pollution (mining, chemicals in river systems)
climate change (negative externality)
human activities result in emission of GH gases eg. carbon dioxide lead to increases in global temperatures
-burning fossil fuels (coal, gas, oil) for electricity & transport
-sometimes agricultural, deforestation practices
while ind&bus pay market price of energy production produces carbon dioxide, only reflects private costs faced by companies in producing
-ind & bus dont pay long term cost of energy use (climate change), unlikely change consumption habits
-GVT policies eg carbon taxes ensures price mechanism reflects costs of carbon emissions
MPEC ways firms in highly concentrated industries possess substantial market power to exploit customers?
- monopolisation
- price discrimination
- exclusive dealing
- collusion & market sharing
how can firms exploit their customers through monopolisation
firm uses dominant market position to eliminate existing compeition/prevent new firms entering market
-eg, temporary price cutting than benefiting consumer
how do firms use price discrimination to exploit customers
sells same type of g/s in diff markets at diff prices
-charge higher prices to consumers believes have higher willingness & ability to pay
-greater degree of market power greater ability for firm to do this
-eg. charge higher for tourist places
how do firms use exclusive dealing to exploit customers
firm sets conditions for supply & exclude retailers from dealing with other compeitotrs
-larger retailers develop complex arrangements that bypass exclusive dealing laws
-eg bunnings warehouse low price bc agreements prevent stock anywhere else
how does collusion & market sharing enable firms to exploit consumers
firms get together and agree on price & market-sharing arrangement (cartel) reduces effective competition between them, inhibiting entry of new competition into market
eg. price fixing competitors agree on price instead of competing
common in OLIGOPOLIES
severe fluctuations in lvl eco activity makes it diff for gvts to sustain eco growth. market forces can bring on boom periods, which lead to what?
boom periods: excess demand for g&s causes inflation (demand-pul), distort business decision making, reduce consumer purchasing power & force increase in interest rates –> RECESSION
recessions increase unemployment, business failures, etc
how does gvt intervene to minimise harmful effects unstable eco growth?
economic stabilisation policies (macroeco policies)
-fiscal & monetary policy
what do macroeconomic policies influence? give examples
entire economy eg. fiscal & monetary policy
who do microeconomic policies influence? give 2 examples
individual firms & industries
competition policy, trade policy
aim of macroeconomic policy & what gvt does to reduce problems of excessive/insufficient eco activity
counterbalance business cycle to stabilise lvl of eco growth.
-excessive, risk inflation & gvt tries spending less, increasing taxation/raising interest rates to keep economy growing longer
recession, gvt tries stimulate growth increasing gvt spending, tax cuts & low IRs
what are microeconomic reform policies for
improve work practices & productivity levels with structural adjustment of individual firms & industries
AUS 3 tiered structure of GVT
- Commonwealth/ FEDERAL GVT
-overall responsibility for eco, most influence on its performance - STATE (6 state & 2 self governing territories NT ACT)
-develop infrastructure, deliver GVT services (health, edu), foster regional development - LOCAL (537)
-local planning, community facilities & roads
under the AUS ____, the central COMM GVT and state gvts are _____ and have diff roles, although they work together
Constitution
independent of each other
AUS Constitution
document provides overall framework for AUS system of democratic GVT & relationship betw Federal and state gvts
-sets law-making powers of Comm and state gvts
-abs limits on gvts abilities
-state covers powers not in constitution for comm
-both share responsibility for eco matters (bus regulation, taxation, health & edu)
main constitutional constraints for COMM GVT
forced to negotiate with (State gvts) 6 state gvts when implementing major eco reforms, need support
state governments role
limited role in national eco management but extensive responsibilities for delivery of GVT services
-operate health system (but COMM major role funding healthcare through medicare system)
-school edu
-infrastructure (transport system, electricity)
largest source of revenue for state governments
GST, collected by COMM, then distributed to states through ….
AUS has ‘vertical fiscal imbalance” wth does this mean
difference between the shares of revenue collection and of expenditure among various tiers of governments is called the ‘vertical fiscal gap
fed has most taxation powers while states have many expenditure responsibilities
what does the NSW GVT spend on the msot & least
health, edu, general public services
recreation, culture and religion
national cabinet
comm negotiates role in formerly traditional responsibilities of states (funding services) and brings together comm, state & territory gvts
local gvts responsibility
local planning & development decisions
-local services, eg. road building, community facilities (parks, libraries)
main source of revenue for local gvts
rates levied on local property owners
1/4 funding from comm & state grants
some from fees, fines imposed by councils
public sector
parts of eco owned/controlled by gvt (all tiers, including gvt enterprises)
2 important indicators of how public sector changed over time
spending as % GDP
public sector(public sector outlays)
-expenditure of all gvt compared with exp for eco as whole
public sector employment as % total employment
-prop of employees working in public sector
public sector outlay as % GDP trends in AUS
increasaed 2nd half of 20th century
-public sector grew sig in decades after WW2,
-stabilised past 20 yrs
-smaller than many industrialised countries, esp Europe
trends in changes to composition of GVT spending
spend less on infrastructure
-spend more on SWP and community services
-transfer payments largest (1/3 of Comm expenditure) (funds transferred back to households as SWP than directly on g&s)
trends in prop workers in public sector
declined 1985-2000 during period of privitisation of most gvt businesses
-since stabilised 16%
-reduction reflects GVTs contracting out many activities in private sector
-many ppl performing GVT services (road building, IT services) now doing as private sector contractors to GVT, not as public sector employees
gvts expanded role after WW2
-in industrialised countries, gvts adopted more active role influencing eco’s performance, spending would accelerate eco activity to achieve full employment levels (Keynesian theory)
1980S, GVTS reduced spending to curb lvls of taxation & borrowing from private sector, budget defecit –> excessive borrowing from private sector
-privitised gvt enterprises!
KT returned after GFC and COVID left aus with persistent budget deficits & ^ debt levels
provision of GVT services from the public sector
as eco grows, LS improve, public expectations of gvt grows in standards of healthcare, edu
-expects community services (polic, recreational facilities)
-expects ability to interact with gvt agencies through individualised, online services
-expected to address problems created by eco growth (Pollution, depletion of natural resources)
before growth of social welfare in public sector and why it did
before development of SWP, relied on charity to survive
-as life expectancy grew, unemployment rates increased, pop aged, cost of these programs increased
how does gvt affect allocation of resources 2
- influencing way bus & consumers behave in market through taxation/spending measures
- producing g&s itself (public goods)
also regulatory policies eg prohibiting sale of undesired goods
purposes of taxation
raise revenue to allow gvt spending
influence price of g&s –> consumer demand & production
-divert resources away from certain types of eco activity
-sreduced rate of tax (tax concessions) attract resources towards specific sector
-mostly indirect taxes
gvt direct taxation to achieve resource allocation goals
direct taxes are paid by individuals/firms where levied (cannot pass to someone else)
-personal income tax, must be paid by person on whom it is levied/company/capital gains tax
gvt indirect taxation to achieve resource allocation goals
indirect tax levied on ind & bus firms but can pass to someone else
-attached to g/s than ind/company
-GST levied on seller but passed to consumer
-can divert resources away from production of undesirable goods
how does government spending directly reallocate resources to a particular sector of the economy/influence decisions of consumers & businesses
attempt to redress market failure to provide allocation of resources fits with community needs and wants
what type of spending can a government do for commuity FGSC
- FUNDING for AUS film productions, otherwise unprofitable
-
GRANTS
-start-ups/new growth industries (without proven track record, lack access to finance) -
SUBSIDIES
-for telecommunications companies (Telstra) to provide broadband services in regional areas where services unprofitable -
CASH PAYMENTS
-to private employment search businesses which find jobs for unemployed ppl
limit of gvt spending to address market failure
by themselves not sufficient enough to substantially change the allocation of resources in the economy
what caused attitudes to shift, widely feeling gvts inefficient in operating their enterprises in late 1900s? what has been done since?
GVT enterprises dont have strong incentives to make profit
-privatisation & reduced direct involvement in provision og g&s
when did globalisation era begin, causing gvt to what
1980s, reduction in gvt intervention in eco
how did globalisation affect AUS income inequality
increased, concerned undermine equality of aussies
TS main ways gvt redistributes income
TAXATION
SOCIAL WELFARE PAYMENTS
average annual income vs lowest –> highest quintiles (20%) affect on income ineq
- as income RISES, so does TAX lvls (before vs after tax disposable income)
-all quintiles receive SOME benefits but LOWEST 2 receive much more
-income inequality reduced through GVT intervention in taxes & benefits
how does gvt use PI taxation
tool to redistribute income by progressively taxing individuals at diff rates
tax base
taxed items
-3 main bases for imposition of taxes
1. income
2. welath
3. consumption
-AUS, income is main tax base
ART average rate of tax
prop of TOTAL income earned paid in tax
MRT marginal rate of tax
prop of any INCREASE IN INCOME must be paid as tax
-how many cents in every EXTRA dollar earned must be paid for gvt
how average rate of tax changes as one’s income increases indicates whether tax is PRP:
PROGRESSIVE
-higher income earners pay greater prop of income **
-ART rises as income increases**
-AUS Personal Income tax
REGRESSIVE
PROPORTIONAL
REGRESSIVE tax
higher income earners pay SMALLER prop income as tax < lower income
-ART falls as income increases
-CST
PROPORTIONAL taz
all income earners pay SAME prop income as tax
-ART constant as income increases
-COMPANY tax in AUS (except bus with low annual turnovers)
what is AUS progressive PI tax system known as
PAYG (pay as you go)
-main instrument of taxation to redistribute income
-tax payments regularly deducted from employee wages
-immediate tax payments from self-employed & ind who derive large prop income from investment
why is GST regressive tax
charged as % of price of g/s sold, irrespective of one’s income
-but 10%, so if % of income, avg rate of tax falls as income rises
what does it mean when payments are MEANS TESTED
ppl on high incomes/large no. assets may be INELIGIBLE to receive some benefits (to reduce income inequality!)
-eg. unemployment benefits, aged pensions, etc
largest single area of SWP
age pension
-financial security in retirement, long life expectancy!
macroeconomic policies
designed to smooth fluctuations in business cycle for sustained eco growth
2 types of macroeco policies
MONETARY (main stabilisation policy)
-higher interest rates can stimulate excessive growth (supply of money to verall inflation, unemployment, growth)
-**low IRs encourage C&I, ^ growth rate
-actions from RBA
6-18 MONTHS for effect on eco
FISCAL POLICY
-direct effect of gvt’s overall spending, taxing, borrowing yrly
main instrument of monetary policy
use DMOs (domestic market operations)
CASH RATE TARGET
Domestic market operations DMO
buying & selling GVT SECURITIES by RBA to affect cash rate in SHORT term money market & influence lvl IRs in eco
IMPACT of TIGHT monetary policy
- wanna slow down lvl eco activity, TIGHTEN, put upward pressure on INTEREST RATES
- IRs ^, REDUCE demand for money & dampen consumer C&I
- lower eco activity
- drop in aggregate demand reduce inflationary pressures MAY lead to RISE in CYCLICAL unemployment
impacts of LOOSE monetary policy
- INCREASE lvl eco acitivty
- PUT DOWNWARD pressure on INTEREST RATES
- IRs increase demand for money & boost C&I
- higher lvl eco activity
- rise in aggregate demand reduces cyclical employment but MIGHT rise inflation
CORPORATISATION
gvt encourages GBE to operate independently from GVT as if they’re private businesses to improve effiency & profitability
public trading enterprises are aka
government (business) enterprises
privitisation simple terms
(GBEs) sold off to private sector
most GVT enterprises not privatised have undergone process of ____
corporatisation
-public enterprises act as private business enterprises with independent managers accountable for performance & limited GVT involvement in business operations
EFFECTS
reforms to GBEs over last 30 yrs
sig improvements in prices & productivity in no. industries
-increased competition from opening new markets –> prices fall significantly
-same as gvt ownership reduced/elimated
-not always reduce prices (water supply, gas)
gvts 3 smaller functions in eco to make markets produce better outcomes in long term
ensure workable lvl of competition in eco
protecting consumers from unfair business conduct
protecting natural environment
goal of increasing competition (for eg) must be balanced against achieving ___
-efficicient resource use
-lower prod costs
-product innovation
-lower prices for consumers
economis of scale
workable competition policies attempt to achieve
contestable markets
minimum barriers to entry in industries by elimnating business practices restrict potential comp (anti-comp)
ACCC
aus competition watchdog ensures businesses dont engage in anti-competitive behaviour
most of reponsibility for consumer protection lies with ___ governmetn
commonwealth
aim of consumer protection legislation
ensure fair business conduct by prohibiting practices that restrict competition & impose penalties on firms breach guidelines
-eg. price fixing betw competitors, misleading ads, price discrimination
ACCC 3 roles
- promote comp
* prevent anti comp behaviour (bus) cartels, price-fixing, monopoly - protect consumers
* laws (prevent misleading/deceptive conduct, product safety - legal action against bus who breach comp & consumer laws
* fines, penalties
wider issues of land management in AUS
FARMING ACTIVITIES
water shortages
soil erosion
rising salinity levels
2 underlying issues in enviro debate (enviro policy concern)
- use of non/renewable resources
- extent which price mechanism doesnt reflect EXTERNALITIES involved in production
-external costs & benefits ofp roduction not reflected on firm’s balance sheet
renewable resources
inputs in PP reproduce themselves, ensuring present consumption of resources doesnt reduce ability of future generations to consume them
(timber, fish)
non-renewable resources
inputs to production where STOCK of resources PERMANENTLY DEPLETED in process of product & consumption (petroleum,coal)
concerns of useing non/renewable resources
industrialised & developing countries rapidly depleting world’s stocks of non-R resources (eg fossil fuel) impact on climate change
-more concerned for climate than exhaustion of non-renewable resources
-gvt policies to encourage renewable energy
price mechanism not reflecting (enviro) externalities in production
using energy resources (coal, oil) –> huge emissions of CO2 –> climate change
-greatest environmetnal threat in world, devastating consequences for future generation
-pollution through industrial output, toxic waste, chemical spills & untreated sewage threatens WATER (most valuable)
-WORLD experiences impact of deterioration of global enviro
AUS response to climate change
emission reduction target of 43% by 2030, achieving ‘net zero’ emissions by 2050
-expected 82% of electricity produced from renewable sources by 2030
The (Commonwealth) Budget
official document tool of GVT for implementing fiscal policy
-shows gvt’s planned expenditure & expected revenue for next financial yr
-early May
fiscal policy
maroeconomic policy influences
-resource allocation
-redistribute income
-reduce fluctuations of business cycle
through
-gvt spending
-txaxation
-the budget outcome
to
-stabilise lvl eco activity
-maintain low inflation
-reduce lvl unemployment
-achieve goals relating to distribution of income
income tax (to individuals & companies + super)
Personal Income Tax
(46% of Comm GVT tax revenue)
-under PAYG system
-deducted regularly from pay cheques of wage & salary earners
-self employed & those derive large prop income from investments also
-PROGRESSIVE nature (higher income tax prop more than lower income)
Company tax
19% GVT revenue
-flat rate 30% on net profit private & public corporations before distribution to shareholders
-bus with <$50 mill turnover pay REDUCED to 25%)
-pay fringe benefits tax (<1% gvt revenue) for non-cash benefits provided for employees (company cars)
superannuation tax collection
3% gvt revenue from super ontributions
-grown recent yrs
GST
all items sold except basic food
-13% of total tax collection, allocated to STATE & territory gvts
excise & customs duties
imposed on producers of certain goods
-based on QUANTITY of product
-8% of gvt revenue mainly from petrol, tobacco, alcohol
-good relatively inelastic demand
-allows GVT apply duty/excise knowing increase in price onyl cause SMALL CONTRACTION in demand
other tax revenue
~1% of gvt revenue
miscellaneous taxes, charges, fees, fines imposed by gvt (parking tickets)
non-tax gvt revenue
8% total gvt rev
-profits from GVT enterprises
-interest, dividends, royalties paid to gvt
key responsibilities of Comm GVT (major expenses) SEHIE
SOCIAL WELFARE
-largest comm gvt outlay
-transfer payments (redistribute income from taxpayers to welfare recipients)
EDU
-funds to unis, training providers, vocational edu, gvt & non-gvt primary & secondary schools
HEALTH
-primarily responsibility of STATE & territory gvts, still funds medicare & PBS (pharmeceutical benefits scheme) & public hospitals
INFRASTRICTURE/social overhead capital
-roads, rails, communication networks
ENVIRO PROTECTION & ECOLOGICALLY SUSTAINABLE DEVELOPMENT
-small area of expenditure
-investment in clean energy & low carbon emission tech, energy efficiency measures & better management of water resources
budget/fiscal outcome
overall outcome of budget, gives indication of overall impect of fiscal policy on state of eco
3 possible budget outcomes
- BALANCED budget
expected gvt revenue (PGR) = planned government expenditure (PGE) - budget SURPLUS
PGR > PGE - DEFECIT
PGR < PGE
3 possible STANCES for change in budget outcome (n)
- CONTRACTIONARY fiscal policy stance
- EXPANSIONARY fiscal policy stance
-
NEUTRAL fiscal policy stance
-gvt doenst change budget outcome from previous yr’s lvl
-budget has NO overall effect on lvl aggregate demand & eco activity
contractionary fiscal policy stance
gvt planning to INCREASE TAX rev/DECREASE GVT EXP/combo
-smaller deficit/larger surplus than previous
-decrease lvl eco activity by dampening aggregate demand
-reduce inflation but risks increasing unemployment if demand reduces too much
EXPANSIONARY fiscal policy stance
reduce tax rev/increase gvt exp/combo
-SMALLER SURPLUS/BIGGER DEFECIT than previous
-increase eco activity lvl by stimulating aggregate demand
-reduce unemployment (to increase prod, firms mut employ extra resources)
-eco grows too quick inflation rises
examples of stances from diff outcomes circumstances
always from previous year to present yr
-surplus –> balanced, EXPANSIONARY (exp risen in relation to rev) (left over to none left over)
-defecit –> balanced, CONTRACTIONARY
automatic stabilisers
instruments inherent in GVT’s budget that COUNTERBALANCE eco activity
-boom, decrease eco activity
-eg transfer payments & progressive tax system
2 main automatic stabilisers
progressive PI tax system
unemployment benefits
2 situations where 2 main automatic stabilisers operating
INCREASE in lvl eco activity
-grows, income ^, –> rise tax rev for gvt
-unemployment falls –> reduce gvt expenditure on unemployment benefits
-budget outcome smaller defecit/bigger surplus (expansionary)
-AS’s –> auto contraction in AD –> stabilises without gvt action
DECREASAE in lvl eco activity
-recession, income falls –> fall in tax rev –> unemp rises –> ^ gvt exp unemployment benefits
-budget outcome *smaller surplus/bigger defecit *contractionary)
-stim AD w/o gvt policy
changes in actual budget outcome are result of 2 coponents
automatic changes to gvt revenue + expenditure brought by changes in lvl eco activity (cyclical component of budget)
deliberate rev & exp changes initiated by gvt (structural component of budget –> key driver of gvt’s fiscal policy stance)
CYCLICAL & STRUCTURAL
changes to eco policy must be advanced first by gvt in power, hence must be approved by___
Cabinet
-committee of senior gvt ministers
most major policy changes muct be authorised throught
Act of Parliament
for proposed law (Bill) passed through parliament, must be supported by majorinty in Lower(?) and Upper(?) house.
lower: House of Representatives
upper: the Senate
how many seats in AUS House of Representatives (lower) & the Senate (upper)
151
76
gvts usually have ____ support in HoR, but rare for gvt to enjoy ____ in THE Senate. what does this mean for elections?
majority, majority
AUS voters support role of Senate as balance against power of gvt
-slows process of developing legislation but more detailed review of policies, curb excess major parties
structure of political parties and gvts
political parties form gvts, key role in process of making eco policy
-fed & state gvts formed by SINGLE political party (AUS Labor Party)/coalition of 2 CONSERVATIVE parties (Liberal & National party) ‘Coalition Parties’
most policy decisions are made by
elected political representatives
process of decision making in gvts tended become more ____ in PM/Premier’s Office recent decades. what does this mean?
centralised
power hands of small no. senior gvt ministers & senior public servants
why do business groups have sig voice in gvt policy decisions?
in market eco, successful & growing businesses crucial for nation’s prosperity
-public influence in public debates
-financial influence over political parties
can offer large donates to political parties to fund campaigns (receive limited public funding to conduct election campaigns)
what are businesses involved in (gvt stuff)
-contribute policymaking across issues affect activities
-dedicate sig resources to lobbying gvts
aus 3 peak business groups
-
Business Council of Australia
-represents chief executives ~100 largest AUS companies -
AUS Industry Group
-represents businesses from range industry sectors -
AUS Chamber of Commerce & Industry
-represents chambers of commerce across AUS (inc smaller bus)
lobbyists representation and context
rep individual companies & advocate for interests of specific firms on issues (tax, regulation, privatisation, outsourcing gvt services)
often former Members of Parliament/former staff of gvt ministers understand policymaking process & how to influence it
unions representation in politics (trend, represent, to gvt, what issues)
fallen as membership declined
-rep interests of their members in individual workplaces
-involved in consultations w/ gvts on policy issues
-participate in public debates
-focus on industrial relations issues
-interests in labour market policies, certain industry policies & measures affects ppl lower incomes
unions relationship with gvts (party)
greater input into policy of Labor gvts > Coalition gvts
-close historic relationship betw unions & Labor party
climare & enviro groups
advocate action for climate change & enviro protection
-conduct research, provide edu info & lobby gvts & companies on enviro at local, national & global lvls
environmental concerns influence in politics
-enviro movement increased profile of enviro issues for eco policymakers
-high priority by AUS Greens Party, sig influence esp in Senate as 3rd largest party in AUS
welfare agencies
rep msot disadv ppl in community (aged, disabled, carers, unemployed, low income)
-ACOSS (Aus council of social services) operates as peak welfare lobby group
how do welfare agencies participate in public policy process?
participating in gvt inquiries & lobbying gvt ministers
-influence process by using media to bring attention to their message & pressure gvt
media role in policymaking
main: report news
-changes w/ rise of social media platforms
-inf operates at many lvls (determine which issues receive coverage to how issues presented in public)
-political leaders try anticipate how media report policies, think policies face heavy criticism, change plans, want win positive media coverage even if limited benefit
interest groups
ppl w/ concerns/expertise relating to specific issues form orgs work towards common ends
-some have strong local focus eg. raise concern to local community
-some formed around specific issues
-others rep particular group in community
-some broader role across multiple issues
international influences on policy making
since 80s, FEM emerged as sig influence on eco policy
-gvts wary of making policy decision unpopular with international financial markets
-if FMs lose confidence in gvt’s eco management, could face fall in exchange rate, higher IRs on gvt borrowing & neg media coverage
-eco policy constant scrutiny from FMs, –> lower budget deficits & stronger commitment to microeco reform
itnernational influences besides FMs
-AUS more integrated with global eco recent decades, weakened power of national gvts
-AUS policy options to assist local indutries limited (eg membership in WTO)
-influenced by overseas policy trends, esp wealthy nations members of OECD (Org for Eco Coop & Dev)
policymaking is influenced by interest groups such as BUEWM
businesses
unions
enviro groups
welfare agencies
also media
what does it mean when gvt cant pass legislation in the Senate w/o support from other senators (how will they pass legislation?)
GVT must negotiate policy details to get legislation passed
