Microeconomic Reforms

The final topic that you will study as part of Unit 4 is Aggregate Supply Policies, or Microeconomic Reforms. This is a much bigger topic, and you will probably spend as long learning this section of the course as you did learning about the two macroeconomic policies combined.

Once again you will need to understand both the approach that has been used by the government, and the impact that these changes have had on the Australian economy. The difference here is that there is no set limit on the number of policy options that could count as “microeconomic reforms”. When the government is making changes to one particular sector of the economy, the implementation of those changes will be an appropriate policy to consider. As such, the range is enormous.

Fortunately the Study Design will provide you with some guidance in this area. This document specifically identifies the types of policies that you should get to know – the impact of Budgetary Policy on aggregate supply (by now you will know all about the impact on aggregate demand!), Immigration Policies and Environmental Policies. You will be able to gain an introductory understanding to each of these policy options from this website. In addition, you will also get to learn more about one of the following: Deregulation, Labour Market Reform, Trade Liberalisation and National Competition Policy. The Study Design only requires you to learn about one of the four options, and so don't worry if your class doesn't cover all of them.

However, as you read through the information in the following pages, keep in mind that I have not written about each and every time that these policies have been used in Australia. It is vital that you read widely when studying the implementation of microeconomic reforms in this country. If you do not, you may get a surprise on the end of year exam…. Also remember the timeframe that is set out in your Study Design - you will need to know about policies that have been implemented in the last four years.