Gambiling Australia Economic Perspectives â€Myassignmenthelp.Com

Question: Discuss About The Gambiling Australia Economic Perspectives? Answer: Introduction The study highlights on the economic analysis of the over consumption of gambling. Gambling takes in various forms that include lotteries, table games, poker machines and scratchies (Bilancini and D'Alessandro, 2012). Recent statistic reflects that Australians has participated in theses different forms of gambling in the previous year. It has been noted that electronic gambling machines are considered as the superseding source of revenue from gambling. In the year 2009, it has been estimated that there were more than 198,300 gaming machines in this nation and the revenue earned from them was near about $59,700. In addition, duties of gambling and taxes are an important funding source to the Australias government and hence directly employs for about 35,000 people (Delfabbro and King, 2012). The economic as well as social cost of gambling in Australia is discussed in this report. It also reflects on the gambling effects on economic efficiency. The study also focuses on the three polici es that aids in reducing gambling in relation with the use of poker machines. Economic and social cost of gambling in Australia Gambling is recreational pursuit for the people of this nation. The stakeholders of this industry argue that gambling provides social benefits to the Australians (Gainsbury et al., 2014). They also squabble that gambling offers indirect range or intangible advantage to the local communities. These advantages include improving life quality for elderly, securing environments a high social cohesion. Social cost refers to the section of internal benefits as well as cost that the person does take into account while undertaking this activity. It relates to the externalities that influence the activity that are inflicted involuntarily on the society. The social and economic cost of gambling fall into nine categories that includes: Crime cost in relation to police, apprehension and incarceration spending. The direct as well as indirect cost may amount to 152 million and 174 million respectively. Business as well as employment cost that includes lost job productivity, work time and employer cost in relation to unemployment. Social service cost relating to job loss and treatment that seeks in minimizing gambling behavioral problems. The indirect cost relating to this might amount to 174 million. Bankruptcy also inflicts society cost in legal form and other expended resources. Direct regulatory cost that relates with oversight of Australian oversight on gambling and its industry Cost related to family such as domestic violence and separation Abused dollars that are obtained in improper way but is not considered as crime. Industry lobbying cost refers to the opportunity cost and utilization of resources in more productive manner. Suicide cases of youth owing to gambling Gambling has adverse consequences to every aspects of society. From societal perspective, the main issue of gambling is stemming from poverty, poor condition of individuals health, low social as well as human capital and rundown of community resources. The economic policy solution regarding this issue is inserting caps on the machine numbers in area of highest socioeconomic disadvantage. Another sol;ution is ban on advertisement on gambling machines. Effects of gambling on economic efficiency Addiction of gambling relates to pathological gambling consumption. It develops into addiction when this leads to obsession and adversely affects the life of the individual. Overconsumption of gambling invests much time as well as money of the Australians (Becchetti et al., 2016). It also loses social contract with self-esteem and self confidence. The above case study shows that around 1.4 million Australians are directly affected by gambling. Overexpansion of gambling leads to deterioration in Australias terms of trade that adversely affects the real income of the economy. The gambling dominant nation directs to balanced growth path and hence it becomes less vulnerable to nations business cycles. Gambling affects the Australian economy in direct as well as indirect way. The direct impact of gambling expenditures represents net addition to the resources of the community. For example, casino directly or indirectly affects on the Australians income as well as their jobs. The direct impact of casino is on the nations income as well as employment that is associated with offering of commodities to its patrons. On the contrary, casino indirectly affects on the communities as employees expend their paychecks in their community and thus leading to more employment (M et al., 2014). Input-output model are used to estimate indirect effects of gambling. These models help in evaluating the effects of gambling on economic development and efficiency of Australia. It also helps in recognizing one industry output that are used as inputs in another industry. Thus, variation in one industrys activities affects both the suppliers as well as customers associated with gambling. Moreover, these mode ls also work through multipliers development that helps in concluding ripple effects on the economy. However, this model aids in explaining negative externalities that result in overconsumption of gambling and inefficient equilibrium above the socially optimum equilibrium (Arifo?lu et al., 2012). Thus, it throws spillover effect on other individuals as marginal private benefit (MPB) exceeds marginal social benefit (MSB). This is shown with the help of the diagram given below: Figure 1: Negative Externality of Gambling Source: (Authors creation) As it is an addictive commodity, the demand becomes inelastic. Thus, taxation does not reduce the demand for quantity enough for MPB=MSB. It can also lead to gambling under black market and adds risk of violence, thus making inefficient solution. The above figure shows that MPB MSB. Australian government has introduced wagering tax for directing fund to gambling rehabilitation centre and offer service to the Australians. Tax reforms the externality as it intends to make both the consumers as well as producers pay social cost of products. However, this helps in reducing bad consumption and creates socially efficient outcome. If tax is not implemented then it leads to overconsumption or addition of gambling. Three effective policies for reducing gambling The three effective policies that facilitates in reducing gambling in relation to use of poker machines are: Pigouvian tax- Pigouvian tax refers to the tax levied on the activity of the market that creates negative externality. This tax is proposed in order to correct outcome of inefficient market and is set equivalent to social cost of negative externalities (Philander, 2012). Pigouvian tax is imposed on activities of gambling in order to attenuate its external cost. It also helps in mitigating unbalanced growth biased by gaming via resource reallocation. Therefore, sin tax is noted for rising economic welfare of Australia. Australian government creates deadweight loss in order to restrict gambling supply in the market. Figure 2: Pigouvian tax on poker machine (Source: As created by author) The SACOSS MODEL This model helps in promoting gambling tax regime that includes gambling taxes imposed for covering the costs associated with it and problem gambling in specific differential rate of tax and concessions that is used to provide incentives for minimization of measures; the remaining taxes directed into wealth fund in which the earnings of that fund move to merged revenue as well as in current expenditure. Quota on poker machines- Poker machines relates to games of chance that requires no skill in playing (Williams et al., 2012). Poker machines of Australia have return to player (RTP) by about 90%. Recent reports of productivity commission reflect that the people of Australia lose $12 billion each year with the help of poker machines. In essence, this poker machines has been introduced for replacing income constraint in respect of time constraint. Non-price policy-The non price policies imposed by the Australian government for reducing gambling includes: Strategizes of family intervention- Strategies are implemented in such a way that the members of family have the capacity in initiating third party gambler (Ross et al., 2012). Education as well as awareness program adopted by the government of Australia The program adopted by the government includes- dispelling myths about gambling and educating Australians Establishing Research of National Gambling- This program is funded by the all state program in order to reduce national gambling. Staff intervention strategies- Australian government as well as industry collaborates for introducing senior staff for identifying problems with patrons. Conclusion It can be concluded from the above report that gambling consequence in negative health effect of the Australians. As Australians are considered as the productive gamblers in the globe, it is necessary to develop national strategy in order to recognize and reduce gambling problem. Problem gambling is noteworthy public health problems in this nation that affects Australians, medical practitioners and governments. Gambling activities in Australia have increased and diversified in recent years. 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