THE ECONOMIC ROLE OF THE GOVERNMENT Essay Example

  • Category:
    Business
  • Document type:
    Essay
  • Level:
    Undergraduate
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    2
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    1096

The Economic Role of the Government

According to Baten and Jorg (2016), the government plays a critical role towards the economic growth of any country. Without the input of the state, there can not be in any tremendous growth of the economy. The two authors say that across the world, virtually all the economies are controlled by the government. Some important aspects of the economy include financial issues and budgeting. These are sole responsibilities of the government; it is upon the government to control all matters concerning money and do the budget. The budget includes the allocation of money to the relevant sectors such as education, infrastructure, and industrial innovation. All these aspects apply to Australia. It’s the government of Australia which collects funds mainly through taxation and allocates them appropriately to steer the development of the country. It allocates funds through a budgetary commission referred to as expenditure review committee. Other leading roles of the government towards the economy of a nation as highlighted by Junankar (2013) include stabilization of the national economy, stressing on human capital, investing in people, and orientation of the country trade. The author says that these are all important aspects which any ruling government ought to give the priority.

In Australia, the government being lead by the president is very keen on the roles as mentioned earlier. Starting with the focus and growth of human capital, the Australian government has done great. Human capital is primarily achieved through education; it is through education that people are acquitted with` the necessary skills required so as working (Brian, 2007). The growth of human capital in a nation steers economic development since its growth leads to an increased production in the country. Looking at the education system in Australia, the government has done great to ensure a high-quality education for the people. The government of the country has well formulated a system which starts from the primary school to secondary education and then the tertiary level which includes universities and the colleges. Throughout the three tiers of education, learners are acquitted with the necessary skills which they can apply in their workplaces and steer the production of the country. Recently, the government of Australia has commenced a project of constructing classrooms across the Solomon Islands. The classes will be very helpful to many students from one to six across the Island and the country at large who will learn the wonders of design and science. This is an example of an institution being built by the Australian government to boost human capital and consequently the economy of the country.

In the aspect of the orientation of international trade, the Australian government has done great. Trade is paramount for the economic growth of any country (Barten & Jorg, 2016). It is through export of goods that a country can sell and get some income which in turn steers the economic growth. In the year 2015, the two-way Australian trade was worth approximately $670 billion something which shows how important business is to the economic prosperity of the country. Some valuable resources available in Australia include; coal, gold, iron ore, lead, diamond, and uranium. It is the role of the Australian government to control the ownership of these resources and give a legal ownership. The government has established a well-formatted framework to ensure sustainable growth and competitiveness of the country globally. Each sector of trade is closely monitored different state organs and departments to ensure that they are well run. Recently, the federal government of Australia offered $181million loan to Sunshine Coast airport. The purpose of the loan is to extend the apron and construct a new runway. The overall objective of this is to facilitate international trade and boost the economy of the country.

The Australian government has well stabilized the national economy of the country. This is evident as the country has not experienced recession for the last two decades (Junankar 2013). The government must establish proper strategies to ensure that its economy grows. Without the appropriate procedures and policies, the economy of a country falls quickly. The government has a role in establishing economic stabilization policies to keep the commercial growing and making it less volatile. According to a report by the Australian Treasury, the government plays different roles to ensure stability and growth of the Australian economy. To start with, it provides some valuable advice on the global economic policies. Second, it advances Australia’s interest always through global financial organizations and in the international forums across the world. Third, the government monitors and analyses the economic developments of powerful countries with high financial capabilities. It tries to borrow from such economies so as to create a better and stable economy. Lastly, it advances the Australia’s interest among different nations across the world.

Through the construction of infrastructure, the government significantly boosts the economy of a country. This includes the construction of roads, railway lines, and ports. According to Baten and Jorg (2016), the socio-economic development of any country and the subsequent economic growth is strongly linked to infrastructure. When there is a well constructed modern road network in a country, people can move freely and transact their businesses without any barrier. The Proper road network in a country goes a long way in boosting the local business and consequently boosting the economy (Junanker, 2013). Apart from helping people too freely and quickly move around while transacting their businesses, good road network also helps people to go to important places such as the schools to get the necessary skills for enabling them deliver and contribute towards the economic growth of their country. The government of Australia has not taken the issue of infrastructure for granted. It has introduced a statutory authority referred to as Infrastructure Australia. The body is charged with overseeing that the country’s infrastructure is well developed and modern. Just to mention a few of the many projects commenced by the Australian government is Murray Basin Rail project in Victoria, Cross River Rail in Queensland, Armadale Road in Western Australia and the Tanami Road in the Northern Territory. All these are great modern projects undertaken by the government to ensure a stable and continued growth of the country’s economy.

References

Baten & Jörg, (2016). A History of the Global Economy. From 1500 to the Present. Cambridge. The Cambridge University Press.

Brian Keeley (2007). OECD Insights; Human Capital

Infrastructure Australia: «Progress and Action,» Report, 2012

Junankar, P. (2013). «Australia: The Miracle Economy.» IZA Discussion Papers 7505, Institute of labor studies.

Macintyre, Stuart (2004). A Concise History of Australia. Cambridge University Press.