Microeconomic Reform in Australia - Essay Example

The paper "Microeconomic Reform in Australia" is a perfect example of a macro and microeconomics essay. The government has numerous economic goals it needs to accomplish to counter economic matters in Australia. Given that these goals may well be hard to realize all together, there are time and again exchanges when meeting these goals and the government has got to prioritise its course of actions so as to pull off what is economically and publicly appealing to the people. In particular, microeconomic policies entail austerity measures to perk up the function of industries and markets so as to control aggregate supply levels (Maddison, 2001).

Microeconomic reform is a process assumed by the government to help in regulating the organization of the economy. In the Australian context, microeconomic reform refers to the Australian policy measures anticipated to deregulate the economy. The reforms are aimed at specific sectors of the economy. Microeconomic reforms are applied through a number of ways, including privatisation, taxation and welfare systems reforms, corporatisation, or specific market reforms. The government can employ one or several measures to boost up the output of each industry in the economy. Although the reforms are targeted at specific sectors of the economy, the intended objective is to raise the overall economic efficiency. Economic efficiency is usually associated with productivity which is the value of output produced given a certain amount of inputs (Maddison, 2001; Productivity Commission, 1999).

Microeconomic reforms act to make sectors of the economy to cut costs and make use of available the resources as competently as possible and facilitate a free flow of resources from one sector to another. The reforms support this efficient allocation of resources by pushing for maximum output from the limited resources. Microeconomic reforms also encourage efficient operations of markets and support technical reforms where production is achieved at a level where the cost per unit is as low as possible together with vibrant changes where firms achieve and sustain efficiency in the long-term. Moreover, the reforms aim to induce attractiveness for private enterprises to open business operations and to improve the economy’s external steadiness in the long-term. Implementation of any of these measures possibly will lead to a rise in the level of productivity, or a rise in the growth rate of productivity in the economy (Maddison, 2001).