Government Role In Australian Economy

At the beginning of the 20th century, the country of Australia became unified and The Commonwealth of Australia officially came into being on January 1, 1901. Today, Australia’s economy is one of the largest mixed market economies in the world, and has since the Commonwealth’s establishment over hundred years ago experienced numerous changes to its economy in terms of its focus. Often regarded as primarily a producer of agricultural commodities, minerals and energy but all of these products suffered a decline in relative importance throughout the twentieth century. Instead, the service sector has grown massively and accounts for by far the largest proportion of both economic activity and employment today. Generally, the Australian government has had a limited role in the economy in line with the traditional government role in a market economy, but the actual extent of their role has fluctuated over the years.
At the beginning of the twentieth century, the role of government …show more content…
Instead, the government decided to run with a more conventional deflationary response of balanced budgets to battle Australia’s current high levels of debt. The basics of this response were to balance the budget through expenditure and wage cuts, but without any additional borrowing from overseas. It also demanded reductions in social welfare programs, defense spending and other sweeping cutbacks. Furthermore, a process that began with the Australian government deciding to take the Australian pound off the gold standard in 1929 as an emergency response of the outbreak of the Great Depression, continued in 1930 when Australian banks began to intentionally slowly devaluing the currency. In turn, this devaluation led to an increase in costs of both imported goods and servicing government overseas