Microeconomic Reform Issues in the Australian Economy

Subject: Economics
Pages: 1
Words: 252
Reading time:
< 1 min

Microeconomic reform issues have been aimed at ensuring that there is economic efficiency through the right policies. These policies have been directed towards the elimination of distortions and reformation of the economy. Since 2000, the Austrian economy has undergone numerous tax reforms. There has been the need to encourage savings among low-income earners in the country. This has been aimed at exciting the markets with long-term economic objectives. Income taxes have also been lowered so that low-income consumers can increase their consumption rates which will improve the economy. In a broader perspective, the level of taxation has undergone a significant reduction in an effort to spur investments and private consumption.

These measures have been successfully implemented. This is evident in that the country has undergone steady economic growth in recent years. An example of such taxes relates to the GST that was introduced in 2000. Increased investments have resulted in the creation of more jobs. In addition, the rate of unemployment has been significantly reduced to settle at 5.3% in 2010. The country’s Gross Domestic Product (GDP) has also increased over the past few years. The annual rate of GDP averages at 3.6%. This has resulted from an increment in the rate at which individuals save in an effort to invest in various sectors of the Australian economy. The high rate of economic growth has also attracted foreign direct investment into the country due to a favorable business environment, further enhancing economic growth.