Let’s get cracking…
…by reading back over the content on decision making in Chapter 4 of the textbook. Once you’re done, you should have a pretty good understanding of the various tools and processes available to you for planning. Now lets’ see how well it works when others plan.
Summarising very briefly:
How do you diagnose a problem? For many things in life, the symptom may be somewhat removed from the problem. For example, if you have mould on your ceiling, you may think that the cause is a leak in your roof, when in fact you may have a source of humidity under your house. The humidity rises with heat, and gets caught in the pores in the ceiling – leading to mould.
Similarly, in our modern society, the cause and the effect are not always connected directly, and the links between them may not be visible. Economic downturns are a bit like that. There are many theories, and many suggested causes for the 2007 financial crisis. There is evidence suggesting that wealth and income inequality are dangerous for economic stability and prosperity, and if you get a chance to view this entertaining and informative documentary, you will get plenty of illustrations of how the two are linked. There are other suggestions, such as low interest rates (which Australia is continually lowering, BTW), but it seems that wealth and income inequality is something to watch very carefully. Recently, the OECD published a report exemplifying how reducing wealth inequality benefits everyone.
Now, governments can do a lot to tackle inequality. Since the GFC, the US government has been able to prevent further growth in inequality. The government in Australia has tried to do the same, and has had mixed results. On one hand, since the GFC, Australia’s wealth inequality has been reduced a little bit. On the other hand, the share of people in Australia reporting to not afford to buy enough food has risen.
This year, the Australian government is considering helping families with children by refunding their childcare expenses. This way, the government aims to encourage parents to get paid work. The government expects that this will increase the hours of paid employment undertaken by 24,000 families, 38,000 of them are jobless families. This will cost about $3.5 billion, over the next four years.
But the money has to come from somewhere. So, in return, single-income families are set to lose their government payments once their children turn six. It may sound like once your kid is in school, you should have no problem to go to work, but for some reason, the same standards were not applied to coupled parents. Only single ones.
Also, a big issue for single parents is managing work demands during school holidays – not an easy task if you are the only one in the parental team.
Back to the planned budget. In addition to the reduction in government spending on single parents, the plan is to reduce the money spent on maternity leave, meaning that working parents have to separate from younger babies and get back to work. Having the parents around in the child’s early years is better for the children’s wellbeing, health, and cognitive development, and these are things that the government would have to pay for later – so that’s another thing to consider.
In addition, the government is planning to spend $250 million on subsidising nannies, and $327 to boost the income for children in disadvantaged families. All this money has to, in the end, balance up in the budget.
Consider the following questions for discussion….
- From the post, what types of planning has the government undertaken prior to the changes to parental payments?
- From the post, what government goals can you identify? Which are the stated goals and which are the real goals? What is the basis for telling them apart?
- What elements of strategic planning are evident in the article? What elements are missing? How would you, as a minister in the Abbott government, use these missing elements?
- Based on the information provided in this post, how would you address the inequality problem in Australia?