The 2021-22 Australian Federal Budget was handed down on the 11 May 2021. Here are five observations about the the budget, and fiscal policy in Australia, that you can use in short answers and essays.

Please note: this is not a comprehensive analysis of the Federal Budget. This is a targeted look at five key facts, with statistics and evidence, that students can use to demonstrate their understanding in the Higher School Certificate Economics exam.

Fiscal Policy is all about how the government uses the federal budget to achieve its economic objectives AND social objectives (see observation 2).

These are my five observations (with time stamps):
1. The Federal Budget is HIGHLY EXPANSIONARY -- even as the size of the deficit shrinks (0:06)
2. The Federal Budget is about more than stimulating aggregate demand (2:25)
3. Increased spending on childcare is an economic measure (3:46)
4. Fiscal Policy and Monetary Policy are working in the same direction (6:16)
5. The Federal Government has committed to shrinking the deficits and changing the budget stance when UE falls below 5% (8:02)

You can also read my blog post on this topic:
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A couple of useful articles that I consulted:

Childcare
The ABC news (Australian ABC) article about how childcare is an economic measure:
www.abc.net.au/news/2021-05-10/childcare-subsidy-budget-spending-economic-benefit/100128082

The source for the quote about childcare measures increasing worked hours in the Australian economy:
www.news.com.au/finance/economy/federal-budget/federal-budget-2021-what-josh-frydenbergs-childcare-changes-mean-for-families/news-story/494b77636f49b9bbc47829d9836bae53

Fiscal discipline
I really like this article. It talks about why economists see budget deficits as being necessary, and when/why the government will change its approach:
hwww.smh.com.au/national/why-i-love-josh-frydenberg-s-budget-in-all-its-big-spending-glory-20210517-p57sj2.html

Check out the gear I use in my videos:
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