Evaluating Fiscal Policy in Australia: ECON11026 Essay

This essay examines the role of fiscal policy as a stabilization tool within the Australian economy, focusing on the current macroeconomic environment. The paper begins by analyzing key economic indicators, including GDP growth, unemployment, and inflation, while also addressing structural issues like wage stagnation and housing affordability. It then delves into the objectives and types of fiscal policy, distinguishing between expansionary and contractionary measures and illustrating their effects on aggregate demand and supply. The essay also explores the multiplier effect of government spending, particularly in infrastructure, and assesses the impact of recent tax cut proposals. Finally, it considers the implications of the forecasted budget surplus and the limitations of fiscal policy in achieving economic stability, drawing on relevant data and government reports to support its arguments.