Government intervention in Australias welfare system
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Government Intervention
Adriahn Frank
"The big question for the government in the provision of services to the poor and the sick is how much money can the community afford to spend when there are other competing priorities. Does the government need to intervene at all in the market and if so, what is the appropriate level?"
Government intervention in the market occurs because of market failings. If the government were not to intervene, poor people would be unable to purchase goods necessary for survival, would not receive a proper education, and would not receive healthcare, because they simply cannot afford it. Society sees these as 'merit goods' and believes that everyone should receive these, regardless of their ability to pay.
Healthcare is integral to the function of an economy because if a worker if sick and cannot afford treatment, they are unable to earn an income. Therefore, healthcare should be equitable and available to anyone, regardless of his or her ability to pay. If healthcare was not subsidised, it would be underprovided, as poor people cannot afford treatment; under consumption occurs, as some people will choose to bear their illness without treatment in order to save money. Many health services are expensive, and people will be unable to afford it without government funding. There are also positive externalities, as treatment of a sick worker will allow him to return to work faster and reduce the time he is without an income and not paying taxes...