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How does the current electricity and gas situation in Australia effect the…
How does the current electricity and gas situation in Australia effect the circular flow of income?
What is the Economic Problem
Australia faces domestic supply challenges. A significant portion of the gas produced is committed to long-term export contracts
The upcoming federal election has brought nuclear energy back into the spotlight.
benchmarks for how much retailers can charge, leading to higher costs for households
However many contribute these gasses, especially nuclear to be damaging to the climate and contributing to climate change
Despite being a major energy exporter, Australia is facing rising electricity prices.
There is a predicted shortage of gas due to a combination of high export commitments and declining production in traditional gas fields
How this effects the circular flow
BUSINESSES
similarly to households, businesses other than electrical have had to use more money on electricity, which can reduce profit and output
However, power companies have been able to increase prices, making more profit, even tho prices are increasing
HOUSEHOLDS
Households have experienced drastic increases over the past 4 years, and with shortages still said to increase, the pricing is likely to continue rising
This significantly impacts the households as more money is being put into the electricity leaving less for other essentials, negatively contributing to the cost of living crisis
INTERNATIONAL
may increase the cost of exports
limit imports
GOVERNMENT
should/ will offer rebates or subsidies
however government is also a consumer
large political debate
CRITERIA
Standard of living decreased
cost of living