22.2 Why has Australia developed a mixed market system?

The Australian economy is based on a market (capitalist) system; however, there is also a role for the government in the economy. Therefore Australia, like many other economies around the world, is a mixed market economy. This can be defined as an economy based on the market system with government intervention. The governments in Australia, at the federal, state and local levels, interact with the economy through the government placing taxes on individuals and businesses (this allows them to gain revenue); through government expenditure such as health, education, and social welfare payments and benefits; and through the provision of services such as Australia Post.

Society as a whole expects the government to provide services and ensure that the economy is running properly. Therefore Australia has a mixed market economy.

DEVELOPING YOUR UNDERSTANDING 22.1

Define the following terms and concepts:

  • market economy
  • mixed market economy
  • economic system.
RESEARCH 22.1

Investigate one government service or department, such as the state education department, Department of Employment, state consumer affairs, Department of Foreign Affairs, Department of Defence, VicRoads or Australia Post. You can visit the websites to gather information. Once you have identified a service or department, prepare a report that answers the following questions:

  1. Identify the main purpose of the service or department.
  2. Describe how it contributes to the economy (for example, monitors what is happening in the economy or overseas).
  • Source 22.6 You can find information about road conditions and the legal aspects of driving from the VicRoads website.
    Source 22.6 You can find information about road conditions and the legal aspects of driving from the VicRoads website.
  • Source 22.7 Websites may comment on organisations such as Australia Post.
    Source 22.7 Websites may comment on organisations such as Australia Post.