3 Impacts that Governments have upon Businesses


  1. Legal Changes ‚ ¨ The current government changes laws daily in order to align laws with political policies. In turn businesses are continuously being affected with an array of changes needed to respond to the shift within the legal framework. Examples of legal changes that have dramatically changed businesses include:
    – The creation of the National Minimum Wage being extended to under 18’s.
    – The legal requirements for businesses to cater for disabled individuals by making building accommodations.

  1. Spending Initiatives ‚ ¨ Governments around the world provide spending initiatives to countries in times of economic despair to boost consumption and investment demands reducing the negative implications such as low unemployment rates. For example in Australia in 2009 the Rudd government’s National Building Economic Stimulus Package injected $42 billion into the economy.
  2. Changes in Interest Rates ‚ ¨ Fluctuations in interest rates can have both positive and negative effects on businesses. Increases in interest rates can lead to a decrease in consumer spending’s; businesses do not thrive when there is a high level of inflation. Whereas a reduction in interest rates can attract investments into businesses and increase production.


Written by: Emily Fleming ‚ ¨ Fresh HR Insights