Fiscal Policy and its Response to COVID-19 by Australian Government

ESSAY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Essay............................................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Fiscal policy is generally use of the government taxation and spending mainly to
influence economy conditions mainly macroeconomic conditions. Government particularly use
this policy to promote sustainable and strong growth as well as reduce poverty (Faria-e-Castro,
2021). This includes aggregate demand for services and goods, inflation, employment and
economic growth. Further, the budget constraint has been said to all the combination of goods
and services that is purchased by the consumer on current prices within his or her income. The
report includes a brief about the fiscal policies and its responded to the COVID– 19 health
shocks By the Australian government. Along, with this the report includes short and long run
implication of responses.
MAIN BODY
Essay
Fiscal policy of the Australia 2022 is designed in such a manner that it overpowers the
impact of Covid -19. Government of Australia uses taxation and spending mainly to influence
economy conditions mainly macroeconomic conditions. Australian Government particularly use
this policy to promote sustainable and strong growth as well as reduce poverty (Faria-e-Castro,
2021). This includes aggregate demand for services and goods, inflation, employment and
economic growth. Expansionary fiscal policy of Australia has been focusing lowering tax rates
or even increasing spending generally to increase aggregate demand as well as fuel economic
growth. The contraction of fiscal policy generally raises the rates or even cut spending to reduce
or prevent inflation. Covid 19 has affected life of the people and also slowing down the economy
growth. It can also be seen in the budget of Australian government. This pandemic generally has
affected a thousand of peoples that is either sick or even being killed because of spread of
Coronavirus disease. This virus is mostly spreading exponentially regions wise. By this the
countries are banning the gathering of people to stop or break exponential curve. The covid – 19
give impact on healthcare and economic as well. For healthcare, it creates challenges in
quarantine, diagnosis and treatment of confirm cases. For healthcare, it gives some consequences
such as overloading of the medical shops, disruption of the medical supply chain etc. The Covid
– 19 give impact on economic as it slow the manufacturing essential goods, poor cash flow,
disrupt supply chain of goods, slow down the revenue growth and losses in international as well
as national businesses.