20602_AC_Economics_and_buisness_Year_6_Making_choices_about_resources

Resource allocation on a national level – 1
A government problem
Making decisions about using resources to fulfil needs and wants on a personal, business or
community level is difficult enough. Imagine trying to fulfil the needs of an entire nation! This is
exactly what federal governments have to do every day. In deciding on how to use and allocate
a nation’s resources, a government must deal with the problem of scarcity. Scarcity means that a
resource is scarce (hard to find or not easily available). While scarcity is something we all have to
deal with, it becomes a huge problem when we are talking about items or services that people
really need. These include basic survival needs like food supplies and clean water as well as other
important needs such as education and health care. Other needs governments have to consider
are energy supplies, housing, transportation and communication services. Of course, all of these
require one main resource—money!
Unfortunately, some countries are not wealthy and/or don’t have enough resources (most
importantly, natural resources) to supply even basic needs for some or all of its citizens. Some
examples of such countries are below.
• In Ethiopia, most people can only get water from shallow ponds or wells. This water is unclean
and can cause disease, as it is shared with animals or contaminated with waste. Ethiopia also
suffers food shortages during times of drought, which are frequent.
• In Cambodia, there is a lack of proper housing, which forces many people to live in slums.
Here, people have no access to basic health services.
• In Bangladesh, many people, particularly those living in rural areas, suffer from hunger and
have limited access to health care, electricity, gas and clean drinking water.
Allocation of resources in Australia
In Australia, we are lucky enough to have a vast range of natural resources and are also among
the richest countries in the world. Most of us enjoy a high standard of living, with all our needs
catered for—but this is certainly not the case for everyone. This includes large numbers of
Indigenous Australians, who generally live with poorer levels of education, health and housing
than most other Australians.
Our government, like all governments around the world, has certain ways of dealing with
allocating resources to its citizens. In a country like Cuba, the government has strict control and
owns most of the country’s resources. It even supplies people with ration books which allows
them to buy a certain amount of specific food per month. But in Australia, the government has
far less control. It only owns about 20% of the country’s resources. The rest is owned by private
businesses. To make money, private businesses must stay aware of what people want to buy
from them. This affects what resources they use to produce goods or services. This should make
you, as a consumer, feel powerful! Every time you make a buying decision, you are influencing
what resources are being used in our country.
R.I.C. Publications ® www.ricpublications.com.au Australian Curriculum Economics and business (Year 6) 17