L‭aw Society & Political Involvement‬

‭Glossary‬

‭Absolute majority‬ ‭half the number of formal votes plus one‬

‭Access‬ e‭ qual opportunity for people who want to make use of the legal‬
‭system‬

‭ dversarial‬
A s‭ystem which two opposing parties present their arguments to a‬
‭system‬ ‭magistrate/judge‬

‭Anarchy‬ ‭complete chaos or disorder due to the absence of law‬

‭Appeal‬ ‭an application for a legal decision to be reviewed in a higher court‬

‭Bail‬ ‭to release an individual accused of a crime for an amount of money‬

‭Balance of power‬ ‭the power an individual or party has by holding casting vote‬

‭ alance of‬
B ‭the standard of proof for civil trials‬
‭probabilities‬

‭Ballot paper‬ ‭a piece of paper that the voter records their vote on‬

‭ eyond‬
B ‭the standard of proof for a criminal trial‬
‭reasonable doubt‬

‭Cabinet‬ t‭he group of select ministers who assist the prime minister with‬
‭important decisions regarding the nation‬

‭Coalition‬ ‭ hen a government becomes possible because two parties agree to‬
w
‭work together and pool their votes‬

‭ ommittal‬
C a‭ hearing in‬‭LOCAL COURT‬‭to decide whether there is‬‭enough‬
‭hearing‬ ‭evidence to put someone on trial for an indictable offence‬

‭Common law‬ t‭he system of law based on decisions made by prior‬

‭judges/precedents‬

‭Constitution‬ ‭a document outlining the powers of parliament‬

‭ onstitutional‬
C a‭ form of government in which a non-elected monarch acts as the‬
‭monarchy‬ ‭head of state.‬

‭Court‬ ‭a place where people resolve disputes relating to the law‬

‭Defendant‬ ‭the party in a case that is being accused‬

‭Democracy‬ ‭a system of government where political power lies with the people‬

‭Discriminate‬ t‭o treat someone differently/less favourable because of factors such‬

‭as gener, race, religion‬

‭Dorothy Dixer‬ q‭ uestions asked to a minister by a backbencher of their own political‬

‭party‬

‭Double dissolution‬ a‭ decision made by the head of state to dissolve both houses of‬
‭parliament‬

‭Federation‬ ‭when the colonies agreed to join together to forth Australia‬

F‭ ederal‬ ‭the House of Representatives and the Senate‬

‭parliament‬

‭Formal vote‬ ‭a vote that has been correctly marked on the ballot paper‬

‭Hierarchy‬ ‭a grading system based on order of importance‬

‭ ouse of‬
H ‭the lower house of Federal Parliament‬
‭Representatives‬

‭Hung parliament‬ ‭a situation where no party has the majority of elected members‬

‭Independent‬ ‭an candidate/member of parliament not belonging to a political party‬

‭Indictable offence‬ ‭a serious criminal offence‬

‭Judge‬ ‭a court official who has the power to make decisions on law matters‬

‭Judiciary‬ ‭the system of courts that interprets and applies law in a country‬

‭Jury‬ ‭a group of either 12 or 6 civilians selected to hear a court case‬

‭Kinship‬ ‭traditional indigenous rules that outline the correct way of living‬

‭Laws‬ ‭a set of rules enforced by the government‬

‭Lobby‬ ‭to attempt to enlist political support for a particular cause‬

‭Magistrate‬ ‭a court official who hears cases in the lowest court of law‬

‭ inority‬
M a‭ political party does not have a majority of overall seats in‬
‭government‬ ‭parliament but they have still formed a government‬
‭Non-parole‬ a‭ set period of time a prisoner must serve before they can be‬
‭released on the promise of good behaviour‬

‭Parole‬ ‭to release a prisoner on the promise of good behaviour‬

‭Plaintiff‬ ‭the party that commences a civil action‬

‭Portfolio‬ ‭an area of government responsibility such as health or defence‬

‭Precedent‬ ‭a previous legal decision that creates/serves as a new rule‬

‭Preferences‬ ‭order of preference in voting‬

P‭ referential‬ a‭ system of voting where you number candidates in order of‬

‭system‬ ‭preference‬

‭Private law‬ ‭deals with disputes between private citizens‬

P‭ rivate‬ a‭ bill that is introduced by backbenchers as opposed to coming from‬

‭member’s bill‬ ‭the government‬

P‭ roportional‬ ‭ hen each senator must win a set proportion of votes to win a‬
w
‭representation‬ ‭Senate‬

‭Prosecutor‬ ‭the party bringing criminal action against the accused‬

‭Public law‬ ‭dealing with disputes that affect the community‬

‭Referendum‬ ‭a vote where the entire electorate is invited to vote on a proposal‬

‭Senate‬ ‭the upper house of the federal parliament‬

‭ eparation of‬
S t‭he functions of the government are spread across the legislative,‬
‭powers‬ ‭executive and judiciary‬

‭Statute law‬ ‭laws made by the parliament‬

‭Sue‬ ‭to bring civil action against a party for causing damage or injury‬

‭Tort‬ ‭a civil wrong‬

‭Trial‬ a‭ process to determine whether someone has committed a criminal or‬

‭civil act‬
‭ Investigate the nature of laws and the reasons for laws in society in relation to‬
“
‭values, morals and ethics”‬

‭ ature of laws‬
N
‭Rules usually exist to create and maintain a sense of order. Every country has their own laws‬
‭enforced by court of law and vary according to beliefs, attitudes and culture of a country.‬

L‭ aws‬‭are a set of rules which society has to obey,‬‭enforced by the legal system‬
‭Rules‬‭are non-legal roles that will not attract any‬‭punishment if broken‬
‭Difference‬‭is that laws are enforced by the law and‬‭will follow with a punishment if broken,‬
‭whereas rules are not legally enforced, and will not attract a punishment.‬

‭ easons for laws in society‬

R
‭Anarchy‬‭is when an extreme case of chaos and conflict‬‭is caused due to an absence of enforced‬
‭laws‬

‭The four main roles of law:‬

‭-‬ ‭Establish boundaries‬‭of acceptable behaviour and determine‬‭which actions will not be‬
‭tolerated. For e.g, drink-driving laws reflect society’s attitude that placing other citizens‬
‭at risk through intoxication is unacceptable‬
‭-‬ ‭Protection‬‭from actions of others as well as our own‬‭behaviour. It does this by telling‬
‭what people cannot do. For example, we cannot commit murder, we cannot ride a bike‬
‭without a helmet. In this role, the law restricts our freedom (individual) but provides‬
‭safety for all individuals in society‬
‭-‬ ‭Freedom‬‭to do many things by telling society what‬‭people can do. E.g driving a car,‬
‭getting married or divorced, leaving school‬
‭-‬ ‭Resolving disputes‬‭in order to stop people from taking‬‭matters into their own hands with‬
‭the legal system (police, court system, jails and juvenile detention centres)‬

‭ alance in society‬
B
‭If society has too many laws people feel restricted and if we don’t have enough laws, chaos‬
‭happens. Important to achieve a balance between not enough laws and too many laws.‬

‭Ethics, moral and values‬

‭-‬ ‭We develop a sense of what's right and wrong from the moral and ethical values of our‬
‭society. Murder is considered a serious crime because out society believes human life is‬
‭valuable. Usually society’s morals and ethical values reflect the beliefs, attitudes and‬
‭values of religious institutions.‬
 -‭ ‬ D‭ ifferent country - Different society - Different values - Different laws‬
‭-‬ ‭As morals, values and ethics change overtime, laws change to cater to values of society,‬
‭e.g abortion and gay marriage laws‬

‭ Describe the role and responsibilities of the three powers of government, including‬
“
‭the division of powers”‬
‭‬
● I‭n 1901 the Commonwealth of Australia was formed‬
‭●‬ ‭Australia became an independent country governed by a constitutional monarchy‬
‭●‬ ‭Three levels of government:‬‭Federal (parliament),‬‭State (parliament), Local (councils)‬
‭●‬ ‭Federal government is responsible for laws listed in section 51 of the constitution‬
‭●‬ ‭State government can legislate for everything else not listed in section 51‬
‭●‬ ‭The constitution outlines the powers of the‬‭Federal‬‭Parliament‬‭and some powers of the‬
‭State Parliament‬

‭Federal Government‬
‭-‬ ‭There are two houses of the federal parliament‬
‭-‬ ‭House of representatives (Lower house/Green)‬
‭-‬ ‭Senate (Upper house/red)‬
‭-‬ ‭The cabinet (executive) includes senior ministers and they make key government‬
‭decisions‬
‭-‬ ‭The Governor General represents the British Monarch as Head of State‬
‭-‬ ‭Responsibilities:‬‭Air travel, Currency, Defence, Foreign‬‭Affairs, Immigration, Medicare‬

‭State Government‬
‭-‬ ‭There are two houses of the state parliament‬
‭-‬ ‭The Legislative Assembly (Lower house/Green)‬
‭-‬ ‭The Legislative Council (Upper house/Red)‬
‭-‬ ‭Controls things that affect citizens within their state‬
‭-‬ ‭The head of the government is the premier‬
‭-‬ ‭The head of the state is the governor‬
‭-‬ ‭Responsibilities:‬‭Aboriginal welfare, Community services,‬‭Education, Transport, Health,‬
‭Sport‬

‭Local Government‬
‭-‬ ‭Approx 550 LGAs in Australia‬
‭-‬ ‭Most local governments are called councils or shires‬
 -‭ ‬ T‭ he head of the council is the mayor‬
‭-‬ ‭Operates under state government legislation‬
‭-‬ ‭Makes rules (by-laws) on local issues‬
‭-‬ ‭Responsibilities:‬‭Libraries, Parks, Rubbish collection,‬‭Sewerage, Swimming Pools, Town‬
‭Planning‬

‭ Identify key features of Australia’s court system, including the High Court, and‬
“
‭its role in interpreting the Australian Constitution”‬

‭The Local Court (bottom tier)‬

‭-‬ ‭160 local courts in NSW‬
‭-‬ ‭All criminal and 90% of civil cases begin here‬
‭-‬ ‭A magistrate who decides the verdict and sets a punishment‬
‭-‬ ‭Minor civil disputes up to $100 000‬
‭-‬ ‭Minor criminal matters e.g stealing, assault, drugs‬
‭-‬ ‭Committal hearings for indictable offences e.g manslaughter, robbery‬
‭-‬ ‭Other roles:‬
‭-‬ ‭Hears bail applications‬
‭-‬ ‭Issues arrest warrants and search warrants‬
‭-‬ ‭Hears applications for AVOs‬
‭-‬ ‭Children’s Court and Coroner’s court are at the same level as the Local Court‬

‭The District Court (third tier)‬

‭-‬ ‭Located in Sydney and larger regional cities‬
‭-‬ ‭Cases are heard by judges‬
‭-‬ ‭Civil cases heard from $100 000 up to $750 000 + all motor vehicle accidents‬
‭-‬ ‭Serious criminal matters e.g armed robbery and manslaughter‬
‭-‬ ‭Some cases jury is present‬

‭Supreme Court (second tier)‬

‭-‬ ‭Highest in NSW (Or any other state)‬
‭-‬ ‭Most serious criminal cases e.g murder, treason, serious sa‬
‭-‬ ‭Civil cases $750 000 plus‬
‭-‬ ‭Located in Sydney and lead by the Chief of Justice‬
‭-‬ ‭Judgement is binding on two lower courts‬
‭-‬ ‭Appeals from local and district courts‬
‭High Court (Upmost tier)‬
‭-‬ ‭Located in Canberra‬
‭-‬ ‭Appeals from High Courts‬
‭-‬ ‭Cases about interpretation of the constitution‬
‭-‬ ‭Creates laws that affect the powers of parliament‬
‭-‬ ‭Shifts balance of power away from states towards commonwealth‬
‭-‬ ‭Decisions are final‬
‭-‬ ‭Federal court meaning any decision made applies to the whole country‬
‭-‬ ‭7 judges: Chief Justice and six Justices - most important cases‬
‭-‬ ‭Other cases dealt with by at least 2 justices‬
‭-‬ ‭No jury‬

S‭ pecialised Court‬
‭Children’s Court‬
‭-‬ ‭Cases involving care and protection of children‬
‭-‬ ‭Criminal cases concerning under 18s‬
‭-‬ ‭Closed to the public and medi a‬
‭-‬ ‭Same personnel as the Local Court‬

‭Coroner’s Court‬
‭-‬ ‭Investigates deaths by unnatural circumstance to determine date, place, circumstances‬
‭and cause of death‬
‭-‬ ‭6000 reportable deaths/annum‬
‭-‬ ‭Investigates the cause and origin of fires and explosions‬

‭Family Court in Australia‬

‭-‬ ‭Resolving complex family matters (divorce, parenting, division of property)‬

‭Day Court in NSW‬

‭-‬ ‭Long term solutions for offenders in a cycle of crime and drugs‬
‭-‬ ‭Eligible for Drug Court Program‬
‭“Describe the role of legal personnel and the role and selection of Juries”‬

‭ ourt Personnel‬
C
‭Judge’s associate:‬‭A trained lawyer that manages paperwork‬
‭Defence Counsel:‬‭If defendant pleads guilty they try‬‭to minimise punishment, if not guilty they try to‬
‭prove innocence‬
‭Barrister:‬‭Acts as a prosecutor for the plaintiff‬‭in civil cases‬
‭Tipstaff:‬‭Helps the judge keep order in the court‬

‭Roles of the Jury‬

‭-‬ ‭A‬‭Hung Jury‬‭is when all 12 jurors can’t decide on‬‭a decision so the court orders a new trial‬
‭-‬ ‭Civil trial - Balance of Probabilities‬
‭-‬ ‭Criminal trial - Beyond Reasonable Doubt‬
‭-‬ ‭Jurors must be fair and impartial, decide what they believe, listen to all facts of evidence and‬
‭remember./understand them‬

‭Empanelling a Jury‬
‭-‬ ‭Letter from the court officer saying you’ve been randomly selected‬
‭-‬ ‭Jurors walk past prosecution and accused counsel so that both parties can decide if they would‬
‭like them‬

‭ rguments for and against the jury system‬

A
‭Advantages‬
‭1.‬ ‭Reflects society’s values as it is a cross-section of society with people from different‬
‭socioeconomic, cultural and racial backgrounds‬
‭2.‬ ‭Widespread acceptance of the jury system‬
‭3.‬ ‭Final decision made by more than one person‬
‭4.‬ ‭Independent and impartial decision makers who aren’t controlled by the government‬
‭5.‬ ‭Ordinary citizens are given opportunities to play an active role in the legal system‬
‭6.‬ ‭Reduces the possibility of bribery or corruption which may occur if the responsibility is on only 1‬
‭individual‬

‭Disadvantages‬
‭1.‬ ‭Because some people are exempt from serving, it is not a true cross-section of society‬
‭2.‬ ‭Ordinary people may not understand complex legal technicalities and jargon‬
‭3.‬ ‭Juries don’t have to give reasons for their decisions‬
‭4.‬ ‭Juries can be easily persuaded by the skills of a manipulative lawyer‬
‭5.‬ ‭Difficult for people to remain completely impartial especially if influenced by media coverage‬
‭6.‬ ‭Costs a lot of money and time for the jury selection process‬
‭7.‬ ‭Jurors can be personally biassed‬
‭“Explain how laws are made including common and statute‬

‭Common Law‬
‭➔‬ ‭Law developed by judges for a case they hear‬
‭➔‬ ‭Judge has to decide on a case where there is no existing law that regulates it‬
‭➔‬ ‭Record of the decision is placed in a book called ‘Law Reports' - Legal precedents‬

‭ precedent‬‭helps the legal system achieve fairness‬‭and justice. If your parents gave your sibling a phone‬
A
‭for their 18th birthday, you would expect to receive something of equivalent value. Your parents set a‬
‭precedent for an 18th birthday present and you expect it to be applied to your case.‬

‭Statutory interpretation‬
‭●‬ ‭Laws made by parliament use complicated language‬
‭●‬ ‭Courts make the law when they interpret a statute‬
‭●‬ ‭Parliament can only change the wording of a law‬
‭●‬ ‭Principle of precedent applies to interpretation as well‬

‭Statute Law‬
‭➔‬ ‭Laws created by parliament have the highest status - parliament makes most laws‬
‭➔‬ ‭One parliament at federal level makes laws that affect the whole country (Federal Parliament)‬
‭➔‬ ‭One parliament at state level makes laws applicable only to that statue (State Parliament)‬
‭➔‬ ‭Parliament referred to as the‬‭supreme law‬‭- making‬‭authority‬
‭➔‬ ‭Statute laws always succeeds over common law‬

‭The beginnings of parliament‬

‭●‬ ‭1215 - King John was forced to sign the Magna Carter‬
‭●‬ ‭1236 - Parliaments were held to discuss more taxes - king had the final say‬
‭●‬ ‭Around 1350 - Parliaments were decided into 2 groups‬
‭●‬ ‭1407 - Henry IV decided community members had to approve a request for money before they‬
‭were considered by the lords‬

‭Federal and state constitutions‬

‭●‬ ‭The Constitution‬‭is a document that outlines the powers‬‭of parliament and is the rulebook for‬
‭how a parliament is to operate and a country is to be governed‬
‭●‬ ‭The Australian Constitution limits the powers of parliament‬
‭●‬ ‭State Parliament is restricted by the state’s constitution‬
‭●‬ ‭Disagreements about who has the power between State and Federal Parliaments are discussed‬
‭at the High Court‬
‭ ow a Bill is Made into a Law‬
H
‭There are very definite procedures for how laws are made or changed. Before any proposed laws can‬
‭become Acts of Parliament, they have to be debated and passed by parliament, and then approved by‬
‭the Executive Council, the head of state and selected government ministers. During the debate, the‬
‭government explains why the law is needed and why it will be good for Australia. The Opposition tries to‬
‭argue why this is not the case. Let’s see, step by step, how all of this happens in the Federal Parliament.‬

S‭ TEP 1:‬‭A proposed new law, or changed law, is discussed‬‭in Cabinet. Often, people in Australia put‬
‭pressure on the government to change something. A decision is then made on what to do.‬

S‭ TEP 2:‬‭If the government decides to proceed, government‬‭lawyers are asked to draft a bill. A bill is‬
‭basically a ‘first draft’ of an Act of Parliament.‬

S‭ TEP 3:‬‭Copies of the bill are given to all members‬‭of the House of Representatives. The members read‬
‭the material in their own time. This is known as the ‘first reading’.‬

S‭ TEP 4:‬‭The bill goes through a ‘second reading’.‬‭During this stage, the responsible minister (for example,‬
‭the Minister for Immigration if the bill is to do with migrants) describes the main purpose and likely‬
‭benefits of the bill. Speakers from the Government and Opposition say what they think about it. Debates‬
‭may take weeks. Then there is a vote. If the majority vote in favour, the bill moves to the next stage.‬

S‭ TEP 5:‬‭The bill is debated again, this time bit by‬‭bit. This stage is known as the committee stage, as the‬
‭debate occurs in parliamentary committees. Changes to the bill may be made.‬

S‭ TEP 6:‬‭The bill, including any changes made during‬‭step 5, goes through a ‘third reading’ in the house. A‬
‭vote is taken. If the majority vote for it, the bill is passed through to the Senate.‬

S‭ TEP 7:‬‭Similar processes to those outlined in steps‬‭3 to 6 occur in the Senate. If the Senate decides to‬
‭change something, the bill is referred back to the House of Representatives for another debate and vote.‬
‭Sometimes the Senate may refuse to approve a bill. If it is a money supply bill, the Governor-General‬
‭calls for a double dissolution of parliament (as the government cannot govern without money). If the‬
‭Senate votes to approve the bill, it is sent to the Governor-General for royal assent.‬

S‭ TEP 8:‬‭The Governor-General meets with a select number‬‭of government ministers in a meeting of the‬
‭Executive Council. If he or she approves and signs the bill, it becomes an Act of Parliament. It is now‬
‭legally binding for all Australians.‬
‭ Outline types of law, including public and private, criminal and civil, domestic and‬
“
‭international”‬

‭Public Law‬
‭-‬ I‭ndustrial Law‬‭is concerned with the rights and responsibilities‬‭of employers and‬
‭employees e.g health and safety, discrimination and disputes‬
‭-‬ ‭Criminal Law‬ ‭is needed to keep community safe from‬‭harm, to provide a way for dealing‬
‭with crime‬
‭-‬ ‭Constitutional Law‬‭deals with laws by which the country‬‭is governed. Powers and‬
‭authority of parliament, the rights of each citizen, powers between deferral and state‬
‭governments‬
‭-‬ ‭Administrative Law‬‭refers to the decisions and powers‬‭of these government‬
‭departments. Law allows courts to review and change the decisions of government‬

‭Private Law‬
-‭ ‬ C ‭ ontract Law‬‭is concerned with legal arrangements‬‭between two or more parties‬
‭-‬ ‭Family Law‬‭regulates family relations and matters‬
‭-‬ ‭Property Law‬‭recognises two types of property: real‬‭property (land and buildings) and‬
‭personal property (goods and services), specifically property law regulates sale, leasing‬
‭etc.‬
‭-‬ ‭Tort Law‬‭Deals with situations when one person infringes‬‭the rights of another, resulting‬
‭in distress or injury e.g mental stress causes by bullying, person may claim financial‬
‭compensation for any loss suffered‬

‭Civil Law‬‭refers to tort and contract law. Types of‬‭tort law include:‬
‭-‬ ‭Negligence‬‭is when one party fails to take reasonable‬‭care and so injuries/harms the‬
‭other party‬
‭-‬ ‭Defamation‬‭is when a party ruins another party’s reputation‬
‭-‬ ‭Nuisance‬
‭-‬ ‭Trespassing‬

‭ riminal Law‬
C
‭The age of criminal responsibility is 10 years old‬

‭ omestic versus International Law‬

D
‭Domestic‬
‭-‬ ‭Australian laws that we are expected to abide by‬
‭-‬ ‭If broken, the case is to be dealt with by the country’s legal system‬
‭International‬
‭-‬ ‭Dealing with issues that cross borders or issues of concern to society in general‬
‭-‬ ‭A way to foster good relations and avoid conflict‬
‭-‬ ‭Developed from treaties and conventions between countries‬
‭-‬ ‭The Charter of the United Nations‬
‭-‬ ‭Responsible for establishing and enforcing laws‬
‭-‬ ‭International Court of Justice and UN Security Council - deploys UN peacekeepers‬
‭-‬ ‭Peacekeepers are military and other personnel who helps countries‬

‭“Investigate why laws change, how they change and the effect of the changes”‬
L‭ aws reflect changes in society‬‭- New laws develop‬‭and old laws are scrapped due to changes in‬
‭social values, technology and political circumstances‬

‭ Research methods an individual or group has taken to influence politicians and‬

“
‭evaluate their effectiveness, for example individual action, actions of lobby groups‬
‭and political parties and the use of the media”‬

‭ eing a politically active citizen means being informed about social political and economic issues‬
B
‭Ways you can be a politically active citizen:‬
‭-‬ ‭Writing letters to politicians‬
‭-‬ ‭Social media‬
‭-‬ ‭Lobby groups‬
‭-‬ ‭Joining a political party‬
‭-‬ ‭Signing petitions‬
‭-‬ ‭Being informed and aware‬
‭-‬ ‭Youth Advisory Councils‬

‭ Outline the process by which referendums to change the Australian Constitution‬

“
‭are initiated and decided”‬
‭The process for changing the Constitution‬
‭●‬ ‭Chapter VIII Section 128 describes the process on how it can be changed‬
‭●‬ ‭Steps:‬
 ‭○‬ 1 ‭ . Proposed change must be approved by majority of members in both houses of‬
‭federal parliaments‬
‭○‬ ‭2. Within six months, a referendum is established for people to vote YES or NO‬
‭○‬ ‭3. More than 50% of all votes must vote YES‬
‭○‬ ‭4. In addition, the majority should be in favour for at least 4 out of the 6 states‬
‭○‬ ‭5. The proposal then goes to the Governor General for the final approval and a‬
‭change is made to the constitution‬

T‭ he double majority‬‭is the requirement of double majority‬‭of votes and majority in at least 4/6‬
‭states‬
‭Where do proposals for change come from?‬
‭●‬ ‭A number of states get together and decide on a change‬
‭●‬ ‭Community pressure‬
‭●‬ ‭The federal government holds an inquiry which may lead to recommendations of change‬

‭ Explain how and why the separation of powers exists between the parliament‬
“
‭(legislative), executive and judiciary‬

‭The Separation of Powers‬

‭●‬ ‭The Westminster system has a number of safeguards to protect citizens‬
‭●‬ ‭The government functions are shares across three arms of government: legislative,‬
‭executive and judicial‬
‭○‬ ‭Power to make the laws (legislative)‬
‭○‬ ‭Putting those laws into action (executive)‬
‭○‬ ‭Enforce the law and settle legal disputes (judicial)‬

‭The Legislative Arm‬

‭●‬ ‭Power to make new laws and to change or repeal existing laws‬
‭●‬ ‭Consists of two separate houses‬
‭●‬ ‭In order for a bill to be passed, it must be voted forward by both parliaments and‬
‭governor general‬

‭The Executive Arm‬

‭●‬ ‭Responsibility of putting laws into action‬
‭●‬ ‭Power lies within Governor-General, but exercised by government ministers‬
‭●‬ ‭Minister of education is responsible for laws relating to education‬
 ‭●‬ ‭Public servants and government employees‬

‭The Judicial Arm‬

‭●‬ ‭Judiciary and the courts‬
‭●‬ ‭Responsible for enforcing the law‬

‭Why?‬
‭●‬ E‭ nsures government and laws are fair‬
‭●‬ ‭Judiciary has the power to ensure the parliament and executive are fair, unbiased, and‬
‭not corrupt. The High Court can declare any law invalid if opposing constitution‬

‭The Division of Powers‬

‭●‬ ‭Constitution ensures no person or organisation has all the power‬
‭●‬ ‭The power is shared across all the arms‬
‭●‬ ‭Law making powers are divided between federal and state‬

‭Federal Parliament‬

‭Parliament‬ ‭Executive‬ ‭Judiciary‬

‭‬ H
● ‭ ouse of Reps‬ ‭‬ G
● ‭ overnor-General‬
‭●‬ ‭Senate‬ ‭●‬ ‭Executive Council‬
‭●‬ ‭Cabinet/Ministers‬
‭●‬ S‭ upreme/high?‬
‭Courts‬
‭●‬ ‭Federal Courts‬
‭●‬ ‭Family court of‬
‭Australia‬

‭State Governments‬

‭Parliament‬ ‭Executive‬ ‭Judiciary‬

‭‬ G
● ‭ overnor‬
‭●‬ ‭Legislative assembly‬
‭●‬ ‭Legislative council‬
‭‬ G
● ‭ overnor-General‬
‭●‬ ‭Executive Councils‬
‭●‬ ‭Premier/Chief‬
‭minister‬
‭●‬ ‭Cabinet/Ministers‬
‭●‬ H ‭ igh/District/Low‬
‭courts‬
‭●‬ ‭Special Courts‬
‭●‬ ‭Tribunals‬
‭“Access to the law and why some individuals or groups have difficulty in doing so”‬
‭ arriers to accessing the law‬
B
‭Cost‬
‭●‬ ‭Not everyone can afford the same level of good representation and lawyers‬
‭●‬ ‭Could deter people from exercising their legal rights‬
‭●‬ ‭Public attorneys are generally not as competent as private attorneys‬

‭Time‬
‭●‬ ‭Lengthy trials - What if the prosecution/victim passes etc.‬

‭Distance‬
‭●‬ ‭A range of places you may need to go to including offices of lawyers, police stations and‬
‭courthouses‬
‭●‬ ‭Remote living means needing to travel long distances‬
‭●‬ ‭Difficulty in acquiring transport, especially if individual does not have a driver's licence‬

‭Procedures‬
‭●‬ ‭Procedures can be intimidating and confusing‬
‭●‬ ‭Insensitivity‬

‭Language‬
‭●‬ ‭Difficulty understanding legal terminology and what is happening in court‬
‭●‬ ‭English isn’t a first language for everyone, meaning it may be difficult to communicate‬
‭with, and understand/be aware of options, and understand what is happening in court‬

‭ the rights and responsibilities of individuals and groups in the democratic process,‬
“
‭including the right to vote”‬

T‭ he right to vote‬‭is held by all Australian citizens‬‭over 18. They are obliged to enrol and keep their‬
‭enrolment up to date. Citizens who are denied the right to vote include‬
‭-‬ ‭mentally unsound‬
‭-‬ ‭anyone convicted of treason‬
‭-‬ ‭prisoners serving a sentence over three years‬
‭Rights‬‭as an Australian citizen include basic rights‬‭that are often taken for granted including freedom of‬
‭speech and freedom of religion. You may leave the country at your will (provided you have a passport)‬
‭and can apply to work for a public service. You also have the right to trial by jury and to be protected‬
f‭ rom discrimination. You also possess the right to decide how you want to be governed through voting‬
‭and being an active citizen.‬
‭Responsibilities‬‭as an Australian citizen over the‬‭age of 18 are that you have to vote, are obliged to pay‬
‭your taxes, obey the laws, serve as part of a jury, and may be asked to defend your country.‬

‭“how an election is conducted and the range of voting methods”‬

‭ ethods of voting‬
M
‭First past the post‬‭is the most simple form of voting‬‭where people vote for the person you would most‬
‭like to win the election and the person with the most votes wins. It is very simple however may result in‬
‭a candidate that only a small portion of the population supports.‬

‭ referential‬‭voting is the system conducted in Australia‬‭where voters list all the candidates in order of‬
P
‭who they would most like to win to who they would least like to win. This is more complicated but allows‬
‭a winner who is most likely supported by the majority of the population.‬

‭ ouse of representatives‬‭elections involve being given‬‭a green ballot paper, where you must place a‬
H
‭number in a box beside each candidate's name. The preferential system is then used and for your vote to‬
‭be formal, a number must be written in each box in order of preference.‬
‭To win a candidate must get an‬‭absolute majority‬‭meaning‬‭they must get half the votes + 1. This is‬
‭sometimes done through first-preference votes, however when no candidate has enough votes, voter‬
‭preferences are counted.‬

‭Proportional representation‬‭involves receiving a white‬‭ballot paper with which you can vote in two ways:‬
‭-‬ ‭Voting above the line will mean that you have to order the boxes from 1-6 in order of preference‬
‭-‬ ‭Voting below the line will mean you need to order the boxes from 1-12 in order of preference‬

‭ the role of political parties and independent representation in Australia’s system‬

“
‭of government, including the formation of governments”‬

‭ olitical parties‬‭are a group of people who band together‬‭because they share the same views about‬
P
‭issues they think are important. They form a party with the aim of getting their candidates elected, to‬
‭influence the decisions of the government. All political parties must be registered with the Australian‬
‭Electoral Commission. Two requirements for the registration:‬
‭-‬ ‭Aims of the party must be submitted‬
‭-‬ ‭Party must have at least 500 eligible voters‬

‭However not all candidates belong to a party as some may be independents.‬

‭Australian Labor Party‬
‭-‬ ‭The oldest political party in Australia, formed in the 1890s‬
‭-‬ ‭This is because unemployment was high and so workers banded together, attempting to change‬
‭things by having a say in the government‬
‭-‬ ‭Therefore trade unions have always had strong links with the ALP‬
‭-‬ ‭Policies promote social justice with main goals being to:‬
‭-‬ ‭Ensure wealth and power is more evenly distributed‬
‭-‬ ‭Provide jobs for everyone wanting to work‬
‭-‬ ‭Abolish poverty and improve living standards‬

‭The Liberal Party of Australia‬

‭-‬ ‭Founded by Robert Menzies in 1944‬
‭-‬ ‭Policies are based on the rights and freedom of all people with its main goal being:‬
‭-‬ ‭A government that minimises interference in daily life and minimises taxes‬
‭-‬ ‭Encourages private businesses‬
‭-‬ ‭Humane society in which family is maintained‬

‭National Party of Australia‬

‭-‬ ‭Founded in 1914‬
‭-‬ ‭Represents people living in rural and regional Australia, fighting for an equality of services,‬
‭lifestyle and opportunity between cities and regions. Main aims are to:‬
‭-‬ ‭Provide strong local representation‬
‭-‬ ‭Ensure decent health, safety, social and economic welfare‬
‭-‬ ‭Promote individual achievement‬

‭Australian Greens‬
‭-‬ ‭Founded in 1992‬
‭-‬ ‭The Greens are a progressive national party founded on four main principles:‬ ‭ecological‬
‭sustainability, social and economic justice peace and nonviolence, and grassroots democracy‬
‭-‬ ‭Main aims are to:‬
‭-‬ ‭Protect and preserve environment‬
‭-‬ ‭Ensure that everyone is treated fairly and with respect‬
‭-‬ ‭Safe, harmonious world‬
‭-‬ ‭Society is governed by the people and not run by the wealthy and powerful‬

‭Independents‬
‭-‬ ‭Members of parliament who don't belong to a political party are called independents. If the‬
‭government does not have a majority in parliament, their decisions can be very powerful as they‬
‭are the deciding vote.‬

‭Formation of the federal government‬

‭-‬ ‭The party with the majority of seats in the House of Reps forms the government - leader PM‬
 -‭ ‬ ‭ n election will result in either the re-election of the existing government or a new government‬
A
‭-‬ ‭Outgoing pm will visit governor-general to resign‬
‭-‬ ‭Newly elected pm gets sworn into office by governor-general‬
‭-‬ ‭Majority party that fails to win becomes the opposition - senior members are shadow ministers‬
‭(opposite ministers)‬
‭-‬ ‭Expected to scrutinise activities of relevant minister‬

‭ describe the process through which government policy is shaped and developed,‬
“
‭including the role of Prime Minister and Cabinet”‬

‭-‬ T‭ he government who wins the election has the responsibility of running the country, this‬
‭involves making policies‬
‭Backbenchers‬
‭-‬ ‭Backbenchers are young and inexperienced members who are involved in parliamentary debate,‬
‭can serve on parliamentary committees and can suggest amendments to bills. They can also‬
‭suggest their own bills which are seldom successful‬

‭Frontbenchers and Cabinet‬

‭-‬ ‭Members of parliament more senior and influential, occupying front rows - frontbenchers‬
‭-‬ ‭Council of senior members, specifically chosen to assist prime minister with policies - cabinet‬
‭-‬ ‭Each government is free to determine its specific function as it is not written in constitution‬
‭-‬ ‭Therefore the pm has significant influence over how the Cabinet works.‬
‭-‬ ‭Properly functioning Cabinet should direct government policy and make decisions regarding the‬
‭most important national concerns‬
‭-‬ ‭During Cabinet meeting, policies discussed, votes conducted‬
‭-‬ ‭Once a vote has been cast, final verdict must be supported by all members of Cabinet regardless‬
‭of personal opinion (known as‬‭cabinet solidarity‬‭)‬

‭The prime minister‬

‭-‬ ‭Final decision-making power in Australian politics is left with the pm‬
‭-‬ ‭The pm can develop their own policies, sometimes in contrast to cabinet views‬
‭-‬ ‭Power is still kept in check however as prime minister policies follow same procedures as bills‬

S‭ haping Australian policy and law‬

‭Setting the policy agenda‬
‭-‬ ‭Winning gives government the right to set the policy agenda for Australia - known as a mandate‬
‭-‬ ‭Governments are free to decide on which areas they will focus on their policy decisions.‬
‭-‬ ‭Pressure groups and members of public can also help set the policy agenda through methods‬
 ‭-‬ ‭ hen successful the influence can both contribute to development of a new policy and result in‬
W
‭the amendment or even complete withdrawal of other policy decisions‬

‭Education funding - an example of government policy development‬

‭-‬ ‭One method of developing a policy is to set up a review of existing practices and invite‬
‭submissions‬
‭-‬ ‭Although education is a state responsibility, the Commonwealth government has provided‬
‭additional funding to both government and non-government schools since 1960s‬

‭Parliamentary debate‬
‭-‬ ‭Although exact function of both houses of the parliament differ, their general purpose is the‬
‭same - to debate issues of national significance and the laws proposed to deal with these issues‬
‭-‬ ‭All parties: ruling party; opposition;members of minorities all participate in the debate and can‬
‭ask questions during question time. These questions are known as‬‭‘Dorothy Dixers’‬

‭ discuss the significance of a parliamentary majority, a hung parliament and‬

“
‭minority government”‬
‭ ung Parliament‬
H
‭When the two major parties have the same number of seats in the House of Reps following an election,‬
‭there is a‬‭‘hung parliament’‬‭. Minor party reps or‬‭independents will decide to support one side or other.‬

‭ inority Government‬
M
‭It can sometimes occur that a government has fewer seats than the opposition but is able to govern‬
‭because it has the support of enough crossbenchers to win important votes in the House of reps, In‬
‭order to remain in power, a minority has to be able to gather enough votes to support its spending‬
‭decisions and to retain the confidence/trust of the house.‬

‭ arliamentary majority/majority government‬

P
‭The opposite of a minority government‬
T‭ he Economic and Business Environment‬
‭Glossary‬

‭Barter‬ ‭similar to TRADE‬‭- the swapping/exchanging of one‬‭good for another‬

‭Biodiversity‬ ‭the variety of plant and animal life in the habitat discussed‬

‭Business cycle‬ ‭the‬‭cycle‬‭of‬‭fluctuations‬‭in the general level of‬‭economic activity‬

‭Consumption‬ ‭purchasing of goods to satisfy needs and wants‬

‭ orporate social‬ b‭ usinesses considering interests (stakeholders, society, environment)‬

C
‭responsibility CSR‬ ‭when making decisions‬

‭Depression‬ s‭evere contraction in economic activity, resulting in business failures,‬

‭high and sustained unemployment, and falling prices‬

‭Economy‬ r‭elated to a country’s production, distribution and consumption of‬

‭services‬

‭Exports‬ ‭goods and services that are sold to other countries‬

‭Fiscal policy‬ t‭he use of the federal government’s budget to achieve economic‬
‭objectives‬

‭Globalisation‬ r‭elated to the interrelation of the economy (goods, ideas, people)‬

‭around the world‬

‭Global sourcing‬ ‭seeking the cheapest materials available‬

‭Imports‬ ‭goods and services purchased from other countries‬

‭Inflation‬ a‭ general rise in prices across all sectors (causes money to lose‬
‭value)‬

‭Innovation‬ c‭reating an additional product for an existing line OR significantly‬

‭improving an existing product‬

‭Interdependence‬ d‭ ependance between participants in an economy e.g consumers and‬

‭businesses‬

‭interest‬ ‭the rate that must be paid to borrow someone else's money‬

‭investment‬ u‭ sing money to develop/upgrade an existing or new business in a way‬

‭that will benefit the businesses profits‬
‭Labour market‬ ‭the buying and selling of labour‬

‭Law of demand‬ ‭the‬‭quantity‬‭of a product‬‭demanded varies inversely‬‭to‬‭price‬

‭Law of supply‬ ‭the‬‭quantity‬‭of a product‬‭supplied varies directly‬‭with‬‭price‬

‭Market‬ ‭where the exchanging of products between buyers and sellers occurs‬

‭ arket‬
M ‭the point at which the demand and supply curves intersect‬
‭equilibrium‬

‭Monetary policy‬ t‭he RBA using interest rates to achieve economic objectives - a‬
‭policy that is needed to manage economic objectives using monetary‬
‭tools, (interest rates, reserve bank rates)‬

‭Price mechanism‬ t‭he relationship between demand and supply and how they influence‬
‭the price of a product‬

‭Production‬ ‭the creation of goods and services‬

‭Recession‬ a‭ re a period of temporary contraction in the economy which results in‬

‭reduced spending, unemployment and slow economic growth.‬

‭Saving‬ ‭regularly putting aside money for future use‬

T‭ ransnational‬ ‭a large business that has branches in more than one country‬
‭corporation‬
‭The five-sector circular flow model 2.2‬
‭ ircular Flow of Income:‬‭Shows the connections between‬‭the five different sectors of an‬
C
‭economy: consumers, businesses, financial institutions, the government, overseas sector.‬
‭-‬ ‭Also demonstrates where money is being injected and leaked in the economy in relation‬
‭to these five sectors.‬
‭-‬ ‭These injections and leakages allow economists to calculate/predict changes within the‬
‭economy.‬
‭Consumers:‬‭hold economic resources (land, labour,‬‭capital and enterprise)‬
‭Businesses:‬‭use the resources of households to produce‬‭goods and services‬‭(production)‬
‭The two are interdependent on each other as‬
‭businesses employ consumers for production‬
‭and households will use this income to buy‬
‭goods and services from businesses‬
‭(consumption).‬
‭-‬ ‭Consumers would not survive without‬
‭businesses as they wouldn't have access‬
‭to satisfy their needs and wants‬
‭-‬ ‭Businesses would not survive without‬
‭consumers as they rely on consumers to‬
‭purchase their goods and services‬

F‭ inancial Sector:‬‭Refers to financial institutions‬‭like banks that act as intermediaries between‬

‭savers and borrowers in an economy by receiving savings of individuals and businesses and then‬
‭lending the same money to people who need it.‬
‭Saving‬‭:‬‭Putting money away for later use is a‬‭leakage‬
‭Investment‬‭: Money is borrowed and used to expand a‬‭business/household’s economy is an‬
‭injection‬

‭ overnment Sector:‬‭Refers to local,‬

G
‭state and federal governments with‬
‭two significant roles‬
‭1.‬ ‭Taxation: the government‬
‭collecting taxes from the profit‬
‭of individuals/businesses a‬
‭leakage‬
‭2.‬ ‭Government expenditure: when‬
‭tax raised money is spent on‬
‭things that support the‬
 ‭economy and public (infrastructure, welfare, education, health) an‬‭injection‬

T‭ he Overseas sector:‬‭Macroeconomic economy and essential‬‭just Exports‬‭(injection)‬‭and‬

‭Imports‬‭(leakage)‬‭.‬

‭ OTE: The circular flow of income is used to predict/measure changes in economic activity,‬
N
‭done by adding up injections and comparing them to leakages.‬
‭-‬ ‭When‬‭injections are greater than leakages‬‭, economic‬‭growth + expanding economy‬
‭-‬ ‭When‬‭leakages are greater than injections‬‭,‬‭economic‬‭decline + contracting economy‬

‭The interdependence between different sectors of the economy 2.3‬

‭Refers to how the five different sectors are interdependent on each other in different ways‬

‭The role of the government in protecting consumers:‬

‭-‬ ‭The government has significant influence in protecting consumers through the‬
‭regulation of the financial sector‬‭.‬
‭-‬ ‭ASCI (Australian Securities and Investments Commission) is an independent‬
‭Commonwealth Government organisation, responsible for the regulation of the financial‬
‭sector.‬
‭-‬ ‭Main roles include:‬
‭-‬ ‭Monitoring the financial services industry‬
‭-‬ ‭Monitoring financial services like investment advice‬
‭-‬ ‭Consumer protection in all aspects of the financial sector e.g superannuation,‬
‭insurance, shares‬
‭-‬ ‭For example, when there is low supply and high demand prices tend to go up. This has‬
‭been evident in recent cases such as the energy and fuel industry. When the prices rise‬
‭too high, the ASCI will intervene and put a cap on the maximum price in order to protect‬
‭consumers.‬

T‭ he role of the financial sector in facilitating business investment‬

‭Setting aside savings from your income is a common practice and often these savings are‬
‭deposited in a bank/financial institution. Financial institutions act as intermediaries between‬
‭savers and borrowers. With the deposits that banks receive, they give that money to borrowed,‬
‭profiting from the interest charged for borrowers‬
 ‭-‬ B ‭ usinesses will often borrow money in order to expand their business (putting money‬
‭into your business e.g renovation, employees in return for long term benefit is known as‬
‭a business investment)‬
‭-‬ ‭Banks will collect large sums of money from people’s savings, available for businesses to‬
‭borrow from‬

‭Investigate the business cycle and its impact on the economy 2.4‬

T‭ he business cycle‬‭refers to a cycle of booms and‬‭recessions which occur in the economy‬

‭(businesses play a significant role and are impacted heavily).‬
‭Recessions‬‭are a period of temporary contraction in‬‭the economy which results in reduced‬
‭spending, unemployment and slow economic growth.‬
‭Depressions‬‭are a more severe recession, resulting‬‭in business failures, high and sustained‬
‭unemployment, and falling prices.‬
‭A recession is when an economy contracts for 6+ months and a depression is a longer/severe‬
‭recession‬

T‭ he business cycle fluctuates, meaning that after a recession economic activity will pick up again‬
‭and then fall back down. This cycle is a basic and impacting feature of the economic system.‬

‭Contraction Key Features‬ ‭Expansion Key Features‬

‭-‬ F‭ alling levels of income and‬
‭production‬
‭-‬ ‭Decreasing consumer spending and‬
‭business sales‬‭(this is due to the‬
‭decreased consumer confidence that‬
-‭ ‬ R‭ ising levels of income & production‬
‭-‬ ‭Increasing consumer spending‬‭(this is‬
‭due to the increased consumer‬
‭confidence that occurs because of‬
‭factors such as low unemployment,‬
 ‭ ccurs because of factors such as‬
o r‭ ise in financial markets like housing)‬
‭unemployment, drop in financial‬
‭markets like housing)‬
‭-‬ ‭Rate of inflation may fall‬‭(Because‬
‭consumers are not likely to spend as‬
‭much and so the economy must‬
‭accommodate to attract consumers)‬
‭-‬ ‭Wages fall or grow very slowly‬‭(as‬
‭businesses cannot afford to pay as‬
‭much)‬
‭-‬ ‭Interest rates eventually fall‬‭(The RBA‬
‭does this to raise consumer‬
‭confidence and encourage them to‬
‭spend more, increasing liquidity‬
‭within the economy)‬
‭-‬ ‭Unemployment rises‬‭(as businesses‬
‭suffer great losses and so have to cut‬
‭employees, but also because business‬
‭becomes slower, meaning there is no‬
‭need for as many employees)‬
‭-‬ ‭Rate of inflation rises‬‭(Because‬
‭consumers are likely to spend and so‬
‭the economy pushes prices higher and‬
‭higher, also due to low supply high‬
‭demand)‬
‭-‬ ‭Wages rise and employees are in a‬
‭strong bargaining positions‬‭(as there‬
‭are more job opportunities and so‬
‭businesses must attract employees)‬
‭-‬ ‭Interest rates eventually rise‬‭(The‬
‭RBA does this to manage inflation‬
‭within the economy, for example the‬
‭housing market crisis)‬
‭-‬ ‭Employment rises‬‭(as businesses are‬
‭thriving and are busier meaning they‬
‭require more employees. They are‬
‭also more financially stable and can‬
‭afford to hire as many employees as‬
‭needed)‬

T‭ he business cycle does not follow a regular pattern and is not set, for example there may be‬
‭contraction in the economy, but recovery actions may take place before it leads to a recession.‬
‭Similarly, there may only be an economic change in a specific industry but because of the‬
‭interdependence throughout our economy, these changes are likely to spread and influence the‬
‭economy.‬

‭ ecessions - downside of business cycle‬

R
‭Are caused mainly by the lack of spending that is influenced by a range of factors.‬‭They are not‬
‭a result of the inability to produce goods and services.‬
‭-‬ ‭When goods/services aren’t purchased by consumers, businesses stop providing those‬
‭goods/services and so cut back on their production and consequently their employees.‬
‭-‬ ‭This causes consumer confidence to decline more and so spending is slowed even‬
‭further, eventually causing the economy to fall into a recession due to the lack of‬
‭liquidity within the economy‬

‭Booms - upside of business cycle‬

‭-‬ ‭Are when consumers spend too much as an outcome of high consumer confidence in‬
‭the stability of the economy.‬
 ‭-‬ B ‭ usinesses expand, employees are hired and incomes increase, meaning total spending‬
‭also increases‬
‭-‬ ‭Consumer and business confidence is high, meaning there is high demand, however‬
‭there’s a limit of supply (low supply).‬
‭-‬ ‭This is a case of low supply, high demand where because of the demand, prices are‬
‭pushed up‬‭(inflation)‬‭, which slowly brings the economy‬‭back down‬
‭-‬ ‭This is happening right now with the current housing market crisis - More and more‬
‭consumers are looking to invest and get their foot into the property market, especially‬
‭with prices only getting higher and higher, however there is not an unlimited supply‬
‭which causes inflation. The RBA had to manage this by increasing interest rates to‬
‭control the rate of inflation.‬

‭Price Mechanism and interaction of demand and supply within a market 2.5‬

‭ emand‬‭is the quantity of a product that consumers‬‭are‬

D
‭willing to purchase at a particular price at a given point in‬
‭time.‬‭As prices increase, demand decreases and vice‬‭versa‬‭.‬
‭This is known as the law of demand.‬

I‭n the diagram to the right, as the price of the blueberries‬

‭decreases, the demand increases.‬
‭The increase in demand for blueberries is called an‬
‭expansion in demand.‬
‭The decrease in demand for blueberries is called a‬
‭contraction in demand.‬

S‭ upply‬‭refers to the quantity of a good or service‬‭that‬

‭businesses are willing/able to offer for sale at a given price,‬
‭at a given point in time.‬‭As prices for a product‬‭increase,‬
‭the quantity supplied will increase and vice versa.‬‭This is‬
‭known as the law of supply.‬

I‭n the diagram to the right, as the selling price of the‬

‭blueberries increases, the supply farmers are willing to‬
‭provide also increases, and when the price decreases,‬
‭farmers supply a lot less blueberries.‬
‭The increase in the supply of blueberries is called an‬‭expansion in supply.‬
‭The decrease in the supply of blueberries is called a‬‭contraction in supply.‬‭
Law Society &‬
‭Political Involvement‬

T‭ he price mechanism‬
‭Once the supply and demand for a product has been‬
‭established, it is possible to plot them both on a graph.‬
‭The point where the demand and supply curve intersect‬
‭is called‬‭market equilibrium‬‭. This is the‬‭point at‬‭which‬
‭buyers and sellers agree on a price‬‭.‬
‭Therefore the‬‭price mechanism‬‭refers to demand and‬
‭supply influencing and determining the price and‬
‭quantity.‬

I‭n the diagram to the right, the equilibrium price for‬

‭blueberries is $6 and the equilibrium quantity is 600‬
‭punnets.‬

T‭ he prices for goods are always changing and this is due to changes in the demand and‬
‭supply.‬

‭ hanges in demand‬
C
‭A change in any factor other‬
‭than price will affect the entire‬
‭demand curve and will shift the‬
‭equilibrium price and quantity.‬
‭Factors that affect demand may‬
‭include: Ethical considerations,‬
‭Economic circumstances‬
‭(recession, inflation), and‬
‭popularity due to some‬
‭external influence (trending,‬
‭seasonal).‬
 ‭Reasons for increases in demand‬
-‭ ‬ A ‭ rise in consumer income‬
‭-‬ ‭Changes in consumer preferences‬‭(if‬
‭something external has encouraged‬
‭more people to buy the product)‬
‭-‬ ‭An increase in population‬‭, the‬
‭number of people in general has‬
‭increased.‬
‭-‬ ‭A substitute for another product‬
‭becomes popular‬
‭-‬ ‭A complementary good becomes‬
‭cheaper‬‭, e.g petrol becoming cheaper‬
‭decreases transport costs and in turn‬
‭all goods OR milk becomes cheaper,‬
‭and is a main ingredient in the food.‬
‭-‬ ‭Prices are expected to rise in the‬
‭future‬‭and so more people wish to‬
‭buy the product now‬
‭ hanges in supply‬
C
‭A change in any factor other than price will cause a shift in the supply curve, with increases in‬
‭supply causing the supply curve to shift to the right, and decreases in supply causing the supply‬
‭curve to shift to the left.‬
‭Reasons for decreases in demand‬
-‭ ‬ A ‭ fall in consumer incomes‬
‭-‬ ‭Changes in consumer preferences‬
‭(product may fall out of fashion or‬
‭season)‬
‭-‬ ‭A decrease in population‬‭, the number‬
‭of people in general has decreased.‬
‭-‬ ‭A substitute good becomes cheaper‬
‭-‬ ‭A complementary good becomes‬
‭more expensive‬‭, e.g petrol becoming‬
‭more expensive has risen transport‬
‭costs and in turn, all goods.‬
‭-‬ ‭Prices are expected to fall in the‬
‭future‬‭meaning people will want to‬
‭wait so they can buy it at a lower‬
‭price.‬
 ‭Factors that cause an increase in supply‬ ‭Factors that cause a decrease in supply‬

‭-‬ I‭ ncreased efficiency‬‭- developed‬ ‭-‬ D ‭ ecreased efficiency‬‭- Technology‬

‭technology that causes an increase in‬
‭the product (industrialisation)‬
‭-‬ ‭Fall in the cost of production‬‭- if the‬
‭wages of employees fall, farmers‬
‭employ more labour and increase‬
‭output.‬
‭-‬ ‭Improved climatic conditions‬
‭-‬ ‭Increase in the number of suppliers‬
‭ruined/factor slowing down process‬
‭-‬ ‭Increase in the cost of production‬‭-‬
‭Cost of goods/labour increases,‬
‭farmers may not afford as much and‬
‭therefore not be able to supply.‬
‭-‬ ‭Unfavourable climatic conditions‬
‭-‬ ‭Decrease in the number of suppliers‬

‭The concept of a market and the various types of markets 2.7‬

‭ market is applicable in any situation where buyers and sellers exchange goods and services. A‬
A
‭market can exist through several mediums (physical, several physical, no physical).‬

‭Retail markets‬‭allow us to buy most of our goods and‬‭services‬

‭-‬ ‭Shopping areas‬
‭-‬ ‭Shopping malls‬
‭-‬ ‭Shopping strips‬
‭-‬ ‭Online shop websites‬

L‭ abour markets‬‭are the exchange of skills and income‬‭between employees and employers, with‬
‭employees being the sellers (selling their skills), and employers being the buyers (buying the‬
‭skills in exchange for income).‬
‭-‬ ‭This market does not operate in a particular physical location, relying on a variety of‬
‭forms of communication including:‬
‭-‬ ‭Physical signs indicating work required‬
‭-‬ ‭Advertisements‬
‭-‬ ‭Online websites for jobs‬

F‭ inancial markets‬‭are the intermediaries between the‬‭savers and borrowers in an economy.‬

‭Households and businesses deposit their savings into a financial institution (income/profit),‬
‭while borrowers in the economy may need money either as individuals or to invest in their‬
‭businesses. Banks make profit by charging interest to borrowers and receiving an extra small‬
‭percentage of the amount of money that a borrower is borrowing (this can be either fixed or‬
‭compound interest).‬
S‭ tock markets‬
‭Another example of a relationship between buyers and sellers, except this time the products‬
‭being exchanged are shares. Businesses can raise money for investment by selling shares to‬
‭individuals who are the buyers, hoping to profit as the business grows.‬

‭ ustomary trading practices of ATSI Peoples and the nature of participation in‬
C
‭markets 2.9‬

‭Customary trading practices‬

‭-‬ ‭Trading in ATDI society involved swapping (‬‭bartering‬‭)‬‭one item for another.‬
‭-‬ ‭This was a useful system as they would often trade for things different groups wouldn’t‬
‭have access to, e.g an inland group might trade with a coastal group for shellfish/seafood‬
‭-‬ ‭Trading was done through the use of trade routes linking most communities, following‬
‭natural features such as rivers, chains, watergoles.‬
‭-‬ ‭Not only goods, but rituals, chants and ceremonies were traded‬

‭Participation in historical and contemporary markets‬

‭-‬ ‭Communities often produced and collected goods depending on where they were‬
‭located‬
‭-‬ ‭Coastal communities might exchange resources such as fish and shells‬
‭-‬ ‭Inland communities might exchange resources such as herbs and stones‬

‭ easons for government intervention in the market, for example energy pricing,‬
R
‭prevention of environmental degradation, conservation of natural resources 2.10‬

‭ s owners of necessary resources are always looking to maximise their profits and incomes, this‬
A
‭money chasing nature can lead to negative outcomes for society and the environment, meaning‬
‭governments may need to intervene in the market.‬

‭Prevention of environmental degradation‬

‭-‬ ‭Environmental degradation refers to the deterioration of an environment as a result of‬
‭pollution and harm to habitat.‬
‭-‬ ‭This is also an economic issue as humans rely on the environment for various necessary‬
‭factors.‬
‭-‬ ‭For this reason governments may intervene in a market to reduce environmental‬
‭degradation by imposing regulations e.g banning littering, use of chemicals while‬
‭manufacturing, where developments can take place etc.‬
‭Conservation of natural resources‬
‭-‬ ‭The overusing of natural resources has both environmental and economic negative‬
‭consequences as these resources which humans rely on for both their lifestyle and‬
‭economy, are limited‬
‭-‬ ‭Challenge of choosing between short-term exploitation of natural resources for‬
‭economic gain‬‭vs the long-term needs of‬‭both society‬‭and the economy‬‭.‬

‭Different types of businesses and their features 2.11‬

‭ nline businesses‬‭are businesses that run some or‬‭all of their business online using the internet.‬
O
‭Recent advancements in technology have made online businesses extremely popular, with‬
‭consumers expecting most businesses to have an online website.‬
‭Online businesses have opened up opportunities for people of all ages and experience to start‬
‭their own businesses.‬

‭ n-demand businesses‬‭are businesses where people do‬‭not need to wait or leave your home as‬
O
‭goods can be delivered to your doorstep. This type of business is gaining popularity as it is‬
‭extremely convenient, and is being made possible through advancements in mobile technology.‬

S‭ mall and large businesses‬

‭Micro business:‬‭fewer than five employees‬
‭Small business:‬‭5-19 employees‬
‭Medium business:‬‭20-199 employees‬
‭Large business:‬‭200 or more employees‬

‭98% of Australia's businesses are small to medium enterprises (SMEs)‬

‭-‬ ‭Fewer than 200 employees and less than $10 million turnover.‬
‭-‬ ‭Consumers rely a lot on SMEs to satisfy needs and wants.‬
‭-‬ ‭They also provide approx 7 million jobs‬

‭ lobal businesses‬‭are companies that have branches‬‭in several countries. Global businesses are‬
G
‭referred to as‬‭transnational corporations‬‭or TNCs.‬‭IT represents the highest level of involvement‬
‭in global business. Examples include: Uber, McDonald’s, Coca-Cola, Westfield.‬

‭ ffshore businesses‬‭are businesses who can get many‬‭factors of their business completed in‬
O
‭other countries, often to take advantage of cheaper production costs in developing countries‬
‭(lower wages, less strict environmental regulations, lower equipment costs). A problem with‬
‭this is several profit chasing companies taking advantage of low paid employees working in‬
‭unsafe conditions. Consumers are being made aware of this and so there is pressure for‬
‭businesses to manufacture ethically.‬
‭ overnment businesses‬‭are government owned and operated, providing essential community‬
G
‭services in sectors such as health, education, transport. Australia Post, Sydney Water, Sydney‬
‭Transport.‬

‭ ot-for-profit businesses‬‭provide services to the‬‭community, running on money from donations.‬

N
‭These businesses often receive tax commissions. Charities, recreational clubs, societies.‬

i‭nvestigate factors influencing business decisions, for example technology, business‬

‭cycle, globalisation 2.12‬

T‭ echnology‬‭has made it possible for businesses to‬‭create efficiency and productivity in order to‬
‭create new products and improve the quality and range of products and services.‬
‭Main advantages:‬
‭●‬ ‭Improving productivity‬
‭●‬ ‭Communication globally that is suitable for both parties‬
‭●‬ ‭Reducing operation costs‬
‭●‬ ‭Eliminating boring and repetitive tasks through the use of replacing labour with robots‬

T‭ he business cycle‬‭has a significant impact on businesses‬‭within the economy. When the‬

‭economy contracts, consumer confidence is lower and businesses surfer loses while if the‬
‭economy expands, consumer confidence is higher and businesses gain more profits.‬

‭Recessionary cycle:‬
‭-‬ ‭Evidence of a contracting economy‬‭: unemployment, decreased‬‭economic growth,‬
‭-‬ ‭Consumer confidence falls as they become more cautious‬
‭-‬ ‭Reduced spending,‬‭business profits fall‬
‭-‬ ‭Cost cutting occurs meaning unemployment‬

‭Boom cycle:‬
‭-‬ ‭Evidence of an expanding economy‬‭: unemployment falling,‬‭increased economic growth,‬
‭inflation‬
‭-‬ ‭Consumer confidence returns as they become more relaxed‬
‭-‬ ‭Increased spending,‬‭business profits increase‬
‭-‬ ‭Cost increase occurs meaning increase in production, employment‬

‭ OTE: Not all businesses experience a fall in revenue during recession or an upswing in trade‬
N
‭during a boom period. Businesses most susceptible are those selling consumer/luxury goods‬
 a‭ s consumers will cut back or increase their spending on these goods the most. This is‬
‭because essentials such as groceries have to be purchased no matter the stability of the‬
‭economy.‬

‭ lobalisation‬‭is the process by which the world is‬‭becoming increasingly interconnected as a‬

G
‭result of exchange that has been enabled by advancements in technology. It involves reducing‬
‭barriers to trade, investment and labour across borders, and can have both positive/negative‬
‭impacts on businesses‬

‭Positive Impacts‬ ‭Negative Impacts‬

‭-‬ E‭ xpanded markets:‬‭Globalisation and‬ -‭ ‬ I‭ncreased competition‬

‭access to technology allows any‬
‭business to go global‬
‭-‬ ‭Cheaper materials‬‭: Enables businesses‬
‭to access the cheapest supplies from‬
‭around the world -‬‭global sourcing‬
‭-‬ ‭Access to labour‬‭: Access to greater‬
‭talent around the world/skilled‬
‭employees. Can also financially‬
‭benefit from cheaper labour in‬
‭developing countries.‬
‭-‬ ‭Increased unemployment in some‬
‭industries:‬‭Industries unable to‬
‭compete with cheaper products will‬
‭close down‬
‭-‬ ‭Environmental & social issues:‬‭TNCs‬
‭that outsource production to‬
‭developing countries may cut‬
‭production costs through:‬
‭-‬ ‭Exploitation of workers‬
‭-‬ ‭Damaging the environment‬

‭The contribution of entrepreneurship and innovation 2.13‬

E‭ ntrepreneurship‬‭involves a person who is willing‬‭to take a risk and has the qualities required to‬
‭turn an idea into a successful business. Entrepreneurs generally look for untapped markets.‬
‭Innovation‬‭generally refers to the process of improving/significantly‬‭contributing to an existing‬
‭product. Invention refers to something completely new being produced, but both these terms‬
‭result in something unique being created.‬

‭ hy they are important‬‭Entrepreneurs and innovators‬‭can significantly influence our lifestyles,‬

W
‭with creations affecting living standards, creating jobs and increasing economic activity.‬
‭The importance of ethical decision-making and corporate social responsibility 2.14‬
‭ orporate social responsibility (CSR)‬‭refers to businesses considering the interests of‬
C
‭stakeholders, society and the environment when making economic and business decisions,‬
‭involving‬‭ethical decision-making‬‭, going beyond the‬‭minimum requirement of the law and‬
‭making decisions that don’t necessarily positively impact the corporation, but are ethical. CSR in‬
‭turn promotes good business as customers gain insight into which businesses are acting‬
‭ethically, and so interact with the businesses that ARE.‬

I‭nvesting‬
‭Glossary‬

‭Assets‬ ‭items of value‬

‭Blue chip shares‬ ‭very safe and secure shares‬

‭Capital gains tax‬ ‭a tax on the profits arising from the increased value of assets‬

‭Capital growth‬ ‭value of an asset increases over time‬

‭Company tax‬ ‭a tax on the profit of a company‬

‭Cryptocurrency‬ ‭a digital currency which can be traded online‬

‭Debenture‬ a‭ document that is issued by a firm when you lend it money. It‬
‭states the amount, interest and term of the investment. If a firm is‬
‭liquidated debenture holders are one of the first to be repaid‬

‭Dividend‬ ‭part of a firm;s profit that is divided amongst shareholders‬

‭Economy‬ a‭ ll activities undertaken for the purpose of production, distribution‬

‭and consumption of goods and services within a country‬

‭Entrepreneur‬ ‭a person who sets out to build a successful business in a new field‬

‭Ethical‬ ‭acceptable to society;s current standards‬

F‭ ixed interest‬ ‭interest rate that remains the same for the period of the loan‬
‭rate‬

‭Income and‬ ‭an ongoing record of income earned and money spent during the‬
e‭ xpenditure‬ ‭previous week‬
‭account‬

‭Investment‬ t‭he use of money to purchase equipment or premises for the‬

‭establishment of a new business or the expansion of an existing‬
‭business‬

I‭nvestment‬ ‭all the investments owned by an individual‬

‭portfolio‬

‭Managed fund‬ a‭ pool of money that comes from people who have similar investment‬
‭goals, and invested in assets such as shares or property, by a fund‬
‭manager‬

‭Market(s)‬ a‭ n exchange of goods, services or resources between buyers and‬

‭sellers‬

‭Mortgage‬ a‭ loan from a financial institution such as a bank where something is‬
‭held as security in case the loan is not repaid, e.g. a house‬

‭Rate of return‬ t‭he profit you receive on your investment as a percentage of the‬
‭original investment‬

‭Share‬ ‭a part ownership of a public company‬

‭Share market‬ ‭place where shares in public companies are bought and sold‬

‭Stockbroker‬ ‭individual or firm that specialises in buying and selling shares‬

‭Superannuation‬ ‭money put aside and saved while you are working for retirement‬

‭ uperannuation‬
S a‭ managed fund designed specifically to produce benefits when you‬
‭fund‬ ‭retire‬

‭Unsecured note‬ ‭ imilar to a debenture. A document that is issued by a firm when‬

S
‭you lend it money. It states the amount, interest and term of the‬
‭investment. An unsecured note holder is one of the last to be repaid‬
‭if a firm is liquidated‬

‭ ariable interest‬
V ‭rate that moves up or down depending on market forces‬
‭rate‬
I‭ndividual and business investment including reasons for investment, financing‬
‭investment 6.2, 6.3‬

‭ easons for investing‬

R
‭Investment‬‭is when money is spent in order to gain‬‭a profitable return. Reasons for investing‬
‭include:‬
‭-‬ ‭Businesses may invest in machinery, technology, people, firms, if they feel that the‬
‭investment will increase the amount of profit generated‬
‭-‬ ‭Individuals often invest their savings to achieve a future goal (regardless of short-term or‬
‭long-term) e.g a holiday, child’s education, future security.‬
‭-‬ ‭Individuals also invest in their own education as their education enables them to earn‬
‭more money‬

F‭ inancing an investment‬
‭Two main ways:‬
‭(1) Personal savings - typically used for small investments‬
‭-‬ ‭Advantage of not paying interest on a loan‬
‭-‬ ‭Takes time to save sufficient funds‬
‭It is important to budget and make a plan to save‬
‭-‬ ‭Write out a set of financial goals‬
‭-‬ ‭Prepare a weekly budget of likely spending‬
‭-‬ ‭Keep record each week of income and expenditure and compare to the budget‬

‭(2) Borrowing money - typically used for large investments‬

‭-‬ ‭You must ensure that you can afford repayments‬
‭-‬ ‭Different loans have different features meaning you should find one that suits your‬
‭purpose‬
‭-‬ ‭Personal loans may be secured or unsecured‬
‭-‬ ‭Home loans involve a choice of either fixed or variable interest rate‬
‭-‬ ‭A‬‭fixed interest rate‬‭remains the same for the period‬‭of the loan which means‬
‭greater control as the repayment amount stays the same‬
‭-‬ ‭A‬‭variable interest rate‬‭moves up and down depending‬‭on the financial market‬

S‭ uperannuation‬‭is a compulsory investment funded by‬‭your employer, meaning you are‬

‭investing into your retirement. You can choose to invest extra income into superannuation for‬
‭several benefits, and can invest within your superannuation account to generate more money‬
‭for your retirement.‬
‭The range of investment options 6.4, 6.6, 6.7‬

‭Range of Investment Options‬

I‭nvestment accounts‬
‭There are a variety of investment accounts offered by banks, building societies and credit unions‬
‭including cash management accounts, internet accounts and term deposits.‬
‭Cash management accounts‬‭are similar to normal accounts‬‭except there is a higher interest rate‬
‭and usually a minimum balance.‬
‭Internet accounts‬‭are only accessible through the‬‭internet. They offer high interest rates but do‬
‭not act as an everyday account.‬
‭Term deposits‬‭are a sum of money deposited and must‬‭be left there for a period of time in‬
‭order to gain high interest rates, but cannot be added to or subtracted from if the interest rate‬
‭is to remain. There is an option to receive your interest either monthly or at maturity.‬

‭Shares‬
‭-‬ ‭Owning shares of a company that has profited may result in being paid a dividend or‬
‭extra shares. You may also benefit from capital growth if the value of the shares‬
‭increase.‬
‭-‬ ‭Stockbrokers have direct access to the market for trading shares and act as an agent for‬
‭others (for a small fee called‬‭brokerage‬‭). You can‬‭also buy and sell shares individually‬
‭online‬
‭-‬ ‭Diversifying your shares and investing in a range of industries spreads the risk.‬
‭-‬ ‭Shares also provide flexibility as you can buy and sell them quickly‬

‭Property‬
‭-‬ ‭Properties are often purchased as a home for the buyer to live in, with advantages like‬
‭no rent, profits from inflation when the property is sold‬
‭-‬ ‭Investment properties may also be bought with advantages such as income from rent,‬
‭profits from inflation when the property is sold, taxation benefits‬

‭ anaged funds‬
M
‭Made up of a pool of money from several people who have similar investment goals. A‬
‭professional manager invests the money in assets, allowing small investors to be involved in the‬
‭investing economy.‬
‭-‬ ‭Cons are below average return because of fees‬
S‭ uperannuation‬
‭This can act as an investment option as you are able to invest within your superannuation‬
‭account. Additional money can be put into this account for tax reasons as well as for investing.‬

‭ ebentures and unsecured notes‬

D
‭Debentures‬‭are long-term loans issued BY a company,‬‭paid back over a long period of time with‬
‭fixed interest. You can invest into a company by buying a debenture, and is more secure than‬
‭shares as interest payments are made by the company, also including security even if the‬
‭company defaults.‬‭Unsecured notes‬‭are similar except‬‭that they are not secured, therefore‬
‭attracting a higher rate of interest.‬

‭ ryptocurrency‬
C
‭Digital finances that are traded online and are a very high-risk investment. Cryptocurrencies‬
‭were created as an alternative to normal currency which is controlled by governments and‬
‭financial institutions.‬

E‭ thical investments‬
‭When investing, some people decide to invest in companies that align with their values (this is‬
‭becoming more common) → known as‬‭ethical investing‬‭.‬
‭Examples of ethical issues that may influence investing:‬
‭-‬ ‭Types of products sold, cigarettes, fur coats‬
‭-‬ ‭Evidence of employee exploitation‬
‭-‬ ‭Environmental degradation e.g deforestation, greenhouse gases, excess waste created‬
‭-‬ ‭Experiments related to genetic engineering/animal testing‬
‭Two ways of investing ethically:‬
‭-‬ ‭Positive screening - involves‬‭investing‬‭in firms who‬‭are taking‬‭ethical‬‭actions‬
‭-‬ ‭Negative screening - involves‬‭avoiding‬‭firms who are‬‭taking‬‭unethical‬‭actions‬

‭ elationship between risk and return‬

R
‭The‬‭rate of return‬‭is a key factor to consider when‬‭investing - The profit received on your‬
‭investment as a percentage of the original investment (how much of the money initially‬
‭invested is being returned as a percentage).‬
‭Two main categories of investment‬
‭1.‬ ‭Growth assets‬‭provide a‬‭higher rate of return‬‭over‬‭longer periods, however they‬
‭fluctuate in the short term meaning‬‭greater risk‬‭(shares,‬‭property)‬
‭2.‬ ‭Income or defensive assets‬‭provide a‬‭lower rate of‬‭return‬‭but are‬‭lower risk‬‭(bonds)‬

‭The higher the rate of return, the greater the risk‬

I‭ nvestment portfolios‬‭are a collection of all the‬‭investments an individual has as it is‬

‭encouraged to spread the risk across several types of investments.‬

c‭onsider factors influencing an investment portfolio for an individual or business, for‬

‭example risk, diversification, short and long-term goals 6.8‬

‭ iversification‬‭means spreading your money across‬‭different types of investments to spread the‬

D
‭risk. Different types of investments perform well at different times, for example shares may be a‬
‭good investment currently, however the previous year property was the best investment.‬

S‭ hort term investments‬‭are generally less than three‬‭years long and have a lower rate of return‬
‭but with the convenience of being able to turn investments into cash quickly‬

L‭ ong term investments‬‭are generally over seven years‬‭long and have a higher rate of return but‬
‭are not able to be turned into cash quickly‬

‭monitoring returns on components of the investment portfolio 6.9‬

‭ onitoring investments of a hypothetical investment portfolio‬

M
‭Three main records that should be kept by shareholders:‬
‭1.‬ ‭The contract note‬
‭2.‬ ‭The CHESS holding statement (Clearing House Electronic Sun-Register System) - keeps records of‬
‭all transfers of share ownership‬
‭3.‬ ‭Dividend statements‬

‭-‬ ‭ uying shares and then selling them for profit is subject to‬‭capital gains tax‬‭and income received‬
B
‭as a dividend has already been subject to‬‭company‬‭tax‬
‭-‬ ‭Investments need to be carefully monitored so that they can be bought and sold at appropriate‬
‭times‬
h‭ ow changes in personal and economic circumstances may lead to variations in‬
‭investment decisions 9.10‬

‭ ersonal circumstances‬‭like illness, change in family‬‭situations, or losing your job may all lead to changes‬
P
‭in your investment goals.‬
‭Economic circumstances‬‭are very broad and there are‬‭various circumstances out of an individual or‬
‭business’ control that may affect their investment goals. For example, changes in the global market‬

‭risk mitigation strategies for managing investments 9.10‬

I‭t is important to identify the consequences and potential risks you‬

‭may face when making an investment. Risk mitigation strategies:‬

‭Four main actions you will most likely take:‬

‭1.‬ ‭Avoid the risk‬‭(entirely remove the risk)‬
‭2.‬ ‭Reduce the risk‬‭(diversify and spread risk)‬
‭3.‬ ‭Manage the risk‬‭(monitor and record)‬
‭4.‬ ‭Transfer the risk‬‭(insurance/ giving ownership to‬‭financial‬
‭managers)‬

‭examine the role and responsibilities of the financial services industry, including‬
‭The role of the financial service industry is to:‬
‭-‬ ‭Provide individuals and businesses with the tools to manage their financials‬
‭-‬ ‭Provide advice on the development/management of investments to ensure financial gain‬
‭-‬ ‭Ensure transactions are processed accurately‬
‭-‬ ‭Assist in identification, evaluation, mitigation of‬‭risk‬
‭-‬ ‭Provide financial reports‬
‭Financial advice‬
‭Institutions help individuals in areas and matters including:‬
‭-‬ ‭Identifying goals‬
 -‭ ‬ ‭Developing‬‭strategies‬‭to help‬‭achieve‬‭those‬‭goals‬
‭-‬ ‭Developing an‬‭investment plan‬
‭-‬ ‭Tax-efficient‬‭investments/‬‭Eligibility‬‭for any‬‭government‬‭assistance‬
‭-‬ ‭Making the most of‬‭superannuation‬
‭-‬ ‭Insurance‬‭needs‬
‭-‬ ‭Planning‬‭retirement‬
‭-‬ ‭Considering‬‭estate planning‬‭needs‬
‭Individuals will be assisted according to their needs, whether they want to focus on a single issue such as‬
‭superannuation or choosing investments, or whether they need assistance with their entire finances.‬
‭Businesses will be assisted with any financial‬‭decisions‬‭they need to make.‬

T‭ he responsibilities of lenders and advisers when providing financial advice‬

‭Financial advisers are trusted by individuals and businesses and so must be licensed by ASIC/ be under‬
‭an organisation licensed by ASIC.‬
‭Responsibilities include:‬
‭-‬ ‭Making reasonable inquiries about the consumer’s financial situation‬
‭-‬ ‭Taking reasonable steps to VERIFY the consumer’s financial situation‬
‭-‬ ‭Making assessments regarding whether the contract is suitable based on background financial‬
‭information‬

T‭ he role of government agencies (ASIC)‬

‭The Australian Securities and INvestments Commission is‬‭an independent government body‬‭,‬‭acting as‬
‭Australia’s corporate regulator. ASIC’S role is to‬‭enforce and regulate company and financial services‬
‭laws‬‭to‬‭protect consumers‬‭, investors and creditors.‬‭ASIC is very important as it has to‬‭maintain the‬
‭financial system‬‭and monitor investment practices,‬‭both which‬‭directly impact Australia’s wealth‬‭.‬