16466 Chapter Notes - Chapter 20: Fair Work Commission, Output Gap, Aggregate Supply
Document Summary
Fiscal federalism: the main savings measure from the 2014-15 budget was a change in the way health and education payments to the states will be calculated. States still have the challenge of finding ways to fund these portfolios as the. Commonwealth government has clearly said they will have to take more responsibility and raise tax revenues to match their spending. Supply side: the effects of the budget are less obvious on the supply side, and these measures work over the medium to long run. Infrastructure investment and education are the two most important areas: employment and wages are driven by output growth and the state of the labour market. No major changes were made to labour market policies affecting participation rates or the fair work commission: the potential growth rate for the economy is determined by underlying trends in population, workforce participation and productivity. Currently treasury estimates that to be 2. 75% a year.
