Microeconomic reform begun in Australia with a big bang, the floating of the dollar in 1983. As illustrated by the graph, the effects of this MER were a rather noticeable increase in Economic Growth, inflation and Unemployment from the previous year of 1982. Since implementation of the National Competition Policy in 1994, there have been very few significant reforms put forward.
However, there have been a few, including:.
Implementation of the GST.
Lowering of Tariff levels.
Privatisation of airports.
In relation to recent trends in inflation, Unemployment and economic Growth, levels have been fairly steady. Unemployment is still falling, along with economic growth. Inflation however seems to be on the rise again. The increase in inflation is all due to the implementation of the new tax system in 1999. Prices in the short run have increased, due to the 10% surcharge for goods and services. The gap between headline and core inflation however is quite large at the moment, due to special factors. Reasons for inflation include the current high prices of petrol due to the war in Iraq. To reduce inflation however, the government simply implements appropriate Microeconomic reforms to lower price levels. .
After 1999, economic growth began to fall steadily, along with unemployment. The falls in unemployment were due to events such as the Sydney 2000 Olympics, where many jobs were created in the economy. The creation of new businesses opens up employment opportunities. Recent MER's which have helped lower unemployment is the privatisation of Airlines, Telstra and government companies. This allows competition into the market, creating more jobs for businesses that want to increase efficiency and productivity to remain competitive. So, due to privatisation, and special events, unemployment levels are currently low.
Economic Growth currently remains steady. Privatisation, along with other MER's has ensured the growth of the Australian Economy.