Effects of Government Intervention on Smoking Rate in Australia and Youth Unemployment in Australia and the World

This article discusses the effects of government intervention on smoking rate in Australia and youth unemployment in Australia and the world. It covers the smoking rate in Australia and Singapore, excise tax on cigarettes, cost and benefit analysis, government campaigns, and youth unemployment in Australia and the world.

ECONOMICS FOR BUSINESS

Table of contents
Essay 1.......................................................................................................................................3
Essay 2.......................................................................................................................................5
Reference....................................................................................................................................7

Essay 1
This essay focuses on the smoking rate of Australia and the effects of the intervention of the
government on the rate of smoking in Australia. The rate of cigarette smoking is defined as
the percentage of the population who is a smoker. The rate of cigarette smoking in Australia
is quite different from other countries such as Singapore and the world average as a whole.
While, 12.9% of the adult smokers in Australia, it is around 16.8% in the case of Singapore
(Davidson, & de Silva, 2018). However, rates of both the countries are lower than the world
average. Apart from the differences in the percentages, the countries show some similarities
too. The rate of smoking is reducing in both Australia and Singapore. Same has also been
observed in the case of the world as a whole as well. Furthermore, young adult accounts for a
significant proportion of smoker in Australia, Singapore and the world as a whole.
Figure 1: The excise tax on elastic demand for cigarette
(Source : Developed by the learner)

Figure 2: The excise tax on inelastic demand for cigarettes
(Source: Developed by the learner)
It can be clearly noted from the figure 1 and figure 2 that, in the case of inelastic demand for
cigarettes, the seller passes the most part of the taxes to the customers. The green rectangle
shows the tax revenue of the government. In the case of inelastic demand government
collects higher tax revenue and the equilibrium quantity falls by a lesser amount compared to
the case of elastic demand.
The cost and benefit analysis helps in the decision making process. In this process, the costs
of a strategy are compared with the benefit that the strategy will provide. The decision is
undertaken if the benefits are more than the costs. By this logic, the government wishes to
reduce smoking because the tax revenue collected from cigarettes is much less than the
treatment cost and the loss of productivity (Forbes, Flanagan, Barrett, Chrome, Baillie, Mills
& Teesson, 2015). The same goes for the statement that as the smoker ages he should quit
smoking. The income of the person decreases as he ages and consumption of cigarettes not
only increases the daily cost but it also increases the treatment costs as well.
Over the years, the government of Australia has not only levied an excise tax to discourage
smokers, but it also carried out campaigns to increase awareness. Since the year 2004, the
information and broadcasting ministry of Australia has undertaken efforts to increase
awareness among the people regarding the ill effects of smoking. Apart from that, the
government also have implemented rules to curb smoking in public as well so that, the
younger generation does not take up smoking seeing other smoking in public. Lastly, the
government also have restricted advisements of cigarettes in different media as well.

However, in practical, the research, on which this essay has been carried out, shows that there
is not clear evidence that, plain packaging, one of the most widely used tools to reduce
smoking rate, reduces the prices or the market shares of the products. Furthermore, the
research also implies that actions from the government generally failed to reduce the smoking
rates.
Essay 2
Unemployment is a concern for most of the governments around the world. The youth
unemployment is an unemployment pertaining to the youth labours. In general, there are
different types of unemployment which arises due to different reasons. For example, the
structural unemployment is an unemployment which arises due to change in technology.
Cyclical unemployment follows the business cycle and hence changes with different phases
of the business cycle (Carvalho, 2015). On the other hand, unemployment due to a search for
an appropriate job is the cause of frictional unemployment. Lastly, the hidden or the
underemployment arises due to the official compilation of unemployment statistics. The
official records define the unemployment in a certain way that it overlooks workers who are
not searching for job opportunities or not using their skills to produce values for the
economy.
Figure 3: the changes in the demand and supply for labour
(Source: Developed by the learner)

According to the information provided in the article, the changes in labour supply mainly
have two factors. While higher education attainment has reduced the supply, population
growth has pushed it to increase. In addition to that, the demand for labours has also changed
over the years. The more service-oriented economy has given rise to the opportunity.
However, the demand has also experienced a lack of intensity due to the absence of full-time
employment for labours of 15-24 years.
One of the main factors which explain the part-time and the casual work for the labours of
this age group is the fact that, the share of full-time education has increased since the last
decade. Apart from that, as per the information of the figure, underemployment has increased
for the labours of this age group. Consequently, these labours work part time and pursue an
academic career which is also part-time. Dhillon & Cassidy (2018) noted that disengaged
labours are also the factor that explains the behaviours of these labours to take up part-time or
casual labours in the Australian economy.
The rate of youth unemployment in Australia historically has been more than the
unemployment in general. As per the data of the year 2017, the youth unemployment was
around 12.5%. This figure has increased due to changing preferences of the youth labours of
the country. Complete educational attainment is being preferred by the young labours.
Furthermore, underemployment for Australia is also very high. The underemployment of
Australian youth is currently 55% which is mainly due to disengagement of signification part
of Australian youth from both studies and work.
The youth unemployment rate in the world as a whole is around 12.9% which is more than
that of Australia which has 12.5% of youth unemployment rate. Given these figures, other
countries such as Singapore has shown a good experience where the youth unemployment
stands at only 8.9% as of the year 2017. The similarity has been observed as youth
unemployment has increased for most of the countries and the world as a whole. This has
been mainly due to the higher preference for educational attainment of the youth. Still, as per
the data, the disengaged labours are proportionately more in the case of Australia which
eventually has created the difference between Australia, other countries and the world as a
whole.

Reference
Carvalho, P. (2015). Youth unemployment in Australia. Policy: A Journal of Public Policy
and Ideas, 31(4), 36.
Davidson, S., & de Silva, A. (2018). Did Recent Tobacco Reforms Change the Cigarette
Market?. Economic Papers: A journal of applied economics and policy, 37(1), 55-74.
Dhillon, Z., & Cassidy, N. (2018). Labour Market Outcomes for Younger People. Bulletin-
Reserve Bank Of Australia, 54-75. Retrieved from
https://www.rba.gov.au/publications/bulletin/2018/jun/pdf/labour-market-outcomes-
for-younger-people.pdf
Forbes, M. K., Flanagan, J. C., Barrett, E. L., Chrome, E., Baillie, A. J., Mills, K. L., &
Teesson, M. (2015). Smoking, posttraumatic stress disorder, and alcohol use disorders
in a nationally representative sample of Australian men and women. Drug and alcohol
dependence, 156, 176-183.