Humanities Term 1 revision

Economy, taxation, living-standards, inflation, unemployment

What is tax?

Money taken by the Government from various sources in Australia used to pay for things in our country.

What does GST stand for?

Goods, Services, Tax

What is GST

The Goods and Services Tax is 10% on most good, services and other items sold.

Income tax

tax charged by the Government based on their income and profits.

What are the three levels of Government?

Federal, State, Local

Progressive taxation

The more money/income somebody earns the more they are taxed at a higher rate.

higher income = higher tax

Regressive taxation

Everybody is charged the same amount of money despite their income.

Proportional taxation

The same percentage for everybody/company. The same proportions.

eg. company tax, taxes all companies %25 of their annual earnings.

Taxable Income

This tax comes after Assesable income after allowed deductions are taken.

Allowable deductions

This refers to expenses that you can subtract from your total income to reduce your taxable income, potentially lowering the amount of taxes you owe.

Assesable Income

The total income considered for tax purposes, before any deductions are applied.

Flat rate of tax

With a flat 10% rate of tax for individuals, everyone pays tax at the same rate on all of their income no matter how much they earn.

Departure tax

A fee charged by the country when a person is leaving the country.

Property taxes

A tax charged directly on the property.

Capital Gains Tax

a tax levied on the returns that people earn from capital investments, like the profits from the sale of stocks or a home.

e.g if you sell an asset for more than you paid for it, the difference is your capital gain, and you'll need to pay tax for that amount.

Capital Gains Tax = Federal tax

Excise tax

A tax on certain goods and services such as fuel, tabacco and alchohol

Economy

A system for producing and distributing goods and services.

What is Inflation?

The increase in the general level of prices in the economy.

What are the types of inflation?

Demand pull inflation and cost push inflation.

Demand Inflation

occurs when there is high demand of a good or service causing the price to increase.

Cost inflation/supply side

occurs due to the increased cost of production which then leads to a decreased supply of these goods. Causing the prices of the goods and services to increase for consumers.

Employer

An individual person or organization that pays people to work for them.

Part-time employment

a job where the worker works fewer hours than full-time workers, typically less than 35-40 hours a week.

Employees

A person who works for a person or a company.

Full-time employment

Employees who work on a permanent basis or on a fixed term contract. Full time workers usually work 38 hours each week.

Casual employment

A job with no fixed hours or long-term commitment, often without benefits like sick leave.

Wage

Payment made by a employer for the employee for work that was done in a specific period of time.

Salary

A fixed amount of money paid to an employee regularly.

Fixed-term employment

A job with a set duration, ending on a specific date or after completing specific projects.

Consumer

A person who purchases goods and services for personal use.

Sellers

Provides products/services for people in exchange for money.

What does GDP stand for and what does it mean?

Gross, Domestic, Product. GDP measures the final value of goods and services in a period of time.

Types of employment

Casual, Full-time, part-time, fixed-term.

Entitlements

The fact of having a right to something.

National Employment Standards

The rules for employees in Australia eg. employees can only work for 30 hours, plus reasonable hours.

Fair work comission

The Government body that makes sure that employers and employees follow the rules/ naional employment standards.

eg. contracts, leave, minimun wages, hours of work, ending employment, workplace problems. etc.

Types of unemployment

frictional, structural, cyclical, seasonal

Define frictional unemployment

Refers to when somebody is unemployed between finishing one job and starting another.

Define structural unemployment

Results in changes in the way goods and services are produced. Meaning that some people are unemployed due to their skills no longer being needed in their workplace because of changes in the world.

Define cyclical unemployment

Occurs when the level of spending in the economy falls. This lack of spending from consumers means businessed have less funding to pay their own staff, leading to individuals being dismissed from work.

Define seasonal unemployment

Results from termination of jobs at the same time each year as a result of seasonal changes.

Impacts of unemployment on the economy

Unemployment leads to less income which decreases your standard of living.

What are living standards

Refers to standards that you need in your life in order to enjoy a good, or high quality, life.

eg. having enough money to buy what you want, or having family around you.

Identify the two components of living standards and what they mean.

Material living standards: the quantity of goods and services consumed by an individual every year.

Non-material living standards: the quality of life for all people.

Impacts of living standards

Impact the quality of a persons life.

What is CPI

Consumer, Price, Index. Measures the percentage change in the price of goods and services.

Define the term per capita

per person

What is tax-free threshold?

The first $18,200 of any person's wage free from tax. You will not pay tax if your income is below $18,200.

The amount of income you can earn without having to pay taxes.

What is microecnomics

the branch of economics that focuses on the behaviour of individual consumers and firms.

How can the economy be measured?

GDP is the most common way of measuring the economy.

What causes deteriorating living standards?

This can be due to unemployment being high causing people to earn less income which then causes them to be unable to afford necessities like food, housing, healthcare and education.

How does inflation benefit the economy?

Small rises in price is a good indicator that the economy is growing.

Why is inflation bad for the economy?

As prices go up it becomes difficult for consumers to afford the goods and services.

What is the ATO?

ATO stands for Australian Taxation Office and is responsible for all tax concerns.

What does local tax collect?

Property values, rubbish bin disposals, fines etc.

What does state tax collect?

Stamp duty, land tax, payroll tax etc.

What does federal tax collect?

Income tax, company tax, goods and service tax etc.

What is the baskets of goods and services?

A basket of goods and services is a collection of everyday items used to track changes in the cost of living and measure inflation.

What is TFN?

A Tax File Number issued by the Australian Government to identify Tax payers.

Supper annuation

Portion of your money saved from working for when you retire.

What is the structure of the House of Representatives?

The structure is described as a single chamber with 151 members, representing Australias 151 electors.

What is a political party

An organised group of individuals who share common politcal goals and ideologies.

What makes a minor party?

Holds a smaller role in the politcal landscape. They typically have fewer elected representatives.

Bicameral Government

Where the parliament is divided into two seperate chambers.

What makes a major party?

Holds a larger role in the political landscape.

e.g. Labour and Liberal

What is the main role of the House of Representatives

To make and pass federal laws

The main role of the Senate

To review, amend, and vote on legislation