Factors That Influence Australian Economic Policies

There have been a number of influences on the framing of Australian government economic policies, these influences include businesses, unions, environmental groups, welfare agencies, political agencies, as well as the media and international influences, and these have all played their part in the shaping of Australia’s current policies and will have an impact on future economic policies.

Governments do not carry out economic policy in a vacuum – there are a number of factors and groups that influence government decisions. It is important to note that for any decision or policy stance there is always more than one alternative. Governments make their decisions based on their own beliefs, economic statistics and advice from the government departments.
They can also be influenced by groups within the economy.

The policies and legislation enacted by the government of the day reflect the beliefs and platform (pre-election promises) of the political party or parties forming the government.
Other political parties besides the party in Power can still play a role and influence government economic policy. The Opposition has an important role to play in ‘keeping the government honest’ by questioning proposed legislation, moving amendments and sometimes calling for inquires to ensure that the political process is transparent and in the interest of all citizens. The Opposition has ‘shadow ministers’ for every government minister and acts as an alternative to government for the electorate to consider in the next election. The two major political forces in Australia are the Liberal-National coalition and the Australian Labour Party (ALP). There are a number of smaller parties who sometimes hold the ‘balance of power’ and have been responsible for raising issues in parliament, sometimes forcing amendments to legislation, for example, the 2010 Federal
Elections.

There are a number of business lobby groups in Australia such as the National Farmers Federation (NFF) and the Business Council of Australia (BCA), which try to influence the government policy and legislation in the areas of industry assistance, taxation reform and concessions, subsidiaries, tariff reform, industrial relations and economic policy. Certain powerful individuals in the business world also have close links with the government.

Trade unions – either as individual unions or through union bodies such as the Australian Council of Trade Unions (ACTU) – attempt to influence government policy on a range of issues including industrial relations, occupational health and safety. The union movement is also involved in social issues such as environmental issues, human rights campaigns and foreign policy in relation to countries such as East Timor. The ACTU is involved in direct negotiations with the federal government over Wage Setting Decision by Fair Work Australia.

Environmental groups such as Greenpeace and the Wilderness Society lobby government regarding local issues such as the placement of mobile telephone towers and nuclear plants, national issues such as logging, salinity and uranium mining, and international issues such as global warming, climatic change, whaling and ozone depletion.
These groups attempt to raise the profile of the environment in economic policy formulation and influence government economic policy in favour of environmental protection, ecologically sustainable development and conservation.

Welfare agencies lobby the government on behalf of the poor and disadvantaged in society, particularly in relation to taxation, government expenditure, welfare policies, wage determination and unemployment assistance. Welfare agencies such as ACOSS (Australian Council of Social Services) and the Brotherhood of St Laurence are vocal about the implications of government economic policy on the poor and have a lot to say around federal budget time.

Media organisations such as News Corporation, Australian Consolidated Press, Fairfax, television and radio stations and newspaper groups report news and encourage public debate on government policies. They play a major role in influencing public opinion, particularly during election campaigns through debate and editorials. Media owners also try to influence the government policy regarding the cross media ownership laws and the regulation of the media
industry.

International influences on government include the foreign policies of allied governments and the treaty obligations of Australia through the United Nations. The government’s economic policy is influenced by changes in the global business cycle (including technology, trade and investment flows) and the policies of trading partners towards free trade and protection. Major trade agreements such as APEC, the Cairns Group, the WTO and the policies of bodies such as the G8, G20, UN, World Bank and IMF also impact on government policies. The Australian government has been a strong supporter of the US “war on terrorism”, supporting the wars in Iraq and Afghanistan by sending troops.