21.3.2
Welfare
The government provides financial and other support to disadvantaged members of the community. The age pension supports those who are beyond retirement age and no longer working. Unemployment benefits are designed to support those who cannot find work. The National Disability Insurance Scheme (NDIS) provides people with a permanent and significant disability with money to access support and services. Not only are welfare payments designed to provide fairness and support to those who need help, but the payments can also have a positive economic effect on markets. Those receiving welfare are likely to spend most of their money, so their spending adds to the circular flow of income
FIGURE3 Welfare payments help those who are not able to earn an income.
throughout the economy. Businesses gain revenue from selling additional goods and services. This, in turn, allows them to employ more people, who also spend their money buying goods and services. 21.3.3 Provision of infrastructure The government is responsible for providing infrastructure like roads, railways and ports. These are crucial for transporting goods from manufacturers to shops. • Ports are needed for importing and exporting goods and moving them within Australia. Tasmania relies on shipping across Bass Strait to receive goods from the mainland and to send its products to other states. • The government provides a postal service that supports correspondence between businesses, as well as the delivery of goods through a parcel delivery service. • The telephone service was originally provided by government before Telstra was privatised and other providers were allowed to enter the market for telephone services. Even today, the national broadband network is an important infrastructure project being funded by the government. Markets cannot operate without efficient systems of communication between consumers and businesses. • Traditionally, energy supplies such as electricity and gas have also been provided by government. These are not only essential for the domestic uses we are all accustomed to, but also for the functioning of businesses. In some states of Australia, electricity and gas supplies have been privatised and are now run by businesses rather than by the government. Even where this has occurred, the original infrastructure was usually built by the government before being sold to the business sector.
SkillBuilder discussion Privatisation 1. What problems might occur when essential industries, such as electricity and gas supplies are privatised? 2. Do you think these essential businesses should be private or government owned?
FIGURE4 Government provides infrastructure to enable markets to function more efficiently.
TOPIC21 Understanding tax and consumer literacy 605
Made with FlippingBook interactive PDF creator