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How was the Current Electricity and Gas Situation affects the Circular…
How was the Current Electricity and Gas Situation affects the Circular Flow of Income in Australia
Household Sector
Leakages
Increased Energy bills and Decreased disposable income
Decreased consumption of goods and services
Increased savings due to uncertainty
Impact
Reduced demand equals less income to businesses
Business Sector
Leakages
Increased production costs and decreased profit
decreased investment in expansion
layoffs resulting in decreased wages paid to households
Injections
Investment in renewable energy or tech
Demand for energy-efficient infrastructure
Impact
Short-term output drop, but potential long-term growth through innovation
Government Sector
Injections
increased subsides for households/businesses
increased investment in renewables and infrasture
Leakages
increased taxes to fund support
Potential cuts to other services
Impact
Stabilises flow if spending balances taxes
International Sector
Injections
Increased gas exports = increase export revenue
Stronger trade balance
Leakages
Foreign-owned energy firms results in profits sent overseas
increase import of energy technology
Impact
Boosts income if export gains circulate domestically
Overall Effect
Tension between leakages and injections
Energy Crisis = strain on flow, but policy and innovation can balance it.