Economics & Business · Year 7

Active learning ideas

Taxation and Government Spending

Active learning helps students grasp taxation and government spending by making abstract financial flows tangible. When students simulate budget decisions or trace money paths, they see how taxes connect to services they use every day, building both financial literacy and civic understanding.

• ACARA Content Descriptions
• AC9HE7K02

• 20–50 min
• Pairs → Whole Class
• 3 activities

Activity 01

• Town Hall Meeting
• 50 min · Small Groups

The 'Great Australian Budget' Challenge

Small groups act as the Federal Cabinet. They are given a 'pot' of tax money and a list of 10 funding requests (e.g., more hospitals, new submarines, climate action). They must agree on a final spend and justify their trade-offs.

Justify whether a progressive tax system is the fairest way to fund public services.

Facilitation Tip

During The 'Great Australian Budget' Challenge, circulate to listen for students discussing trade-offs between services rather than just picking favorites.

What to look for

Provide students with a simple income and tax rate table. Ask them to calculate the total tax paid and the percentage of income paid in tax for three different hypothetical individuals. This checks their understanding of progressive taxation.

• Apply
• Analyze
• Evaluate
• Create
• Decision-Making
• Social Awareness

Activity 02

• Town Hall Meeting
• 20 min · Pairs

GST Scavenger Hunt

Students look at a variety of receipts (or photos of them). They must identify which items have GST added and which are 'GST-free' (like fresh fruit and milk) and discuss why the government made those choices.

Analyze the opportunity costs of increasing military spending at the expense of education.

Facilitation Tip

For the GST Scavenger Hunt, assign small teams so students can debate whether items should be taxed and why before scanning codes.

What to look for

Pose the question: 'If the government had an extra $1 billion to spend, should it go towards building new hospitals or improving public transport? Why?' Facilitate a class discussion where students must justify their choices using the concept of opportunity cost and potential economic benefits.

• Apply
• Analyze
• Evaluate
• Create
• Decision-Making
• Social Awareness

Activity 03

• Think-Pair-Share
• 20 min · Pairs

Think-Pair-Share: Progressive Tax

Students are given three 'income levels' and three 'tax rates.' They discuss with a partner whether it is 'fairer' for everyone to pay the same dollar amount, the same percentage, or for the rich to pay a higher percentage.

Explain how government spending stimulates economic activity during a downturn.

Facilitation Tip

In Think-Pair-Share: Progressive Tax, explicitly ask students to explain their partner’s point of view before sharing with the class.

What to look for

On a slip of paper, ask students to name one way the Australian government collects money and one specific service that money funds. They should also write one sentence explaining whether they think this is a fair system and why.

• Understand
• Apply
• Analyze
• Self-Awareness
• Relationship Skills

A few notes on teaching this unit

Teach taxation by starting with students’ lived experiences, like their family’s use of Medicare or public schools. Avoid overwhelming them with complex tax formulas early; focus first on the principle of collective responsibility. Research shows that when students role-play budget roles, they better understand opportunity cost and fairness.

Successful learning looks like students confidently explaining how tax brackets work, justifying budget choices with evidence, and recognizing that government services rely on shared resources. They should also articulate why fairness in taxation matters to society.

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Watch Out for These Misconceptions

• During The 'Great Australian Budget' Challenge, watch for students assuming the government has unlimited funds.

  Use the budget sheets to trace each dollar back to a tax source, asking, 'Where did this money come from before it became part of the pool?'

• During Think-Pair-Share: Progressive Tax, watch for students believing moving to a higher tax bracket reduces total take-home pay.

  Have students use the tax bucket visual aid to calculate total tax on two incomes, one just below and one just above a bracket threshold, to see the marginal rate in action.

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Methods used in this brief

• Town Hall Meeting
• Think-Pair-Share