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Prime Minister Julia Gillard released the 'Australia in the Asian Century' White Paper in October 2012, describing it as 'a roadmap showing how Australia can be a winner in the Asian Century'. This article provides a review of Australia's progress on engagement with Asia 2 years after the White Paper. It covers the political and performance status of key Asia- related initiatives following the election of the Abbott government. It finds a high level of continuity and support for individual policies and objectives in the White Paper. However, there have been some significant changes in policy, emphasis and approach and emerging areas of underperformance. [ABSTRACT FROM AUTHOR]

How large is Australia's fiscal space? Blanchard (2019) shows that as long as the real interest rate R $R$ is below the real growth rate G $G$, a government can sustain a positive primary deficit with a constant (or even declining) ratio of public debt to GDP. In this article, we explain the neutral real interest rate and the reasons for its decline. Then, we discuss the results of a companion paper, Domínguez and Quiggin (2022), in which we quantify the fiscal space for Australia and find that a permanent increase in the primary deficit can be afforded up to reaching a debt to GDP ratio of 79 per cent. Furthermore, this so‐called 'free lunch' in the fiscal space can be expanded if debt is used to finance public investment. [ABSTRACT FROM AUTHOR]

This paper presents an original estimation of the size of the ground‐rent appropriated by competing social subjects in the Australian economy over the long term, and of several economic variables necessary to accomplish that measurement. The paper also assesses the relative importance of ground‐rent in total surplus‐value and the Australian process of capital accumulation, finding that it constitutes a significant portion. Finally, the paper estimates the determinants of the ground‐rent yielded by mining lands used to produced iron ore and mineral coal during the recent 'commodities price boom', stressing the importance of the location factor. [ABSTRACT FROM AUTHOR]

Australia has a long‐standing dependence on foreign investment to make up the difference between domestic saving and investment opportunities. There is, nevertheless, an ongoing debate about the merits or otherwise of inward foreign investment. There has also been a recent tightening of criteria governing foreign investment. The OECD assesses Australia's foreign direct investment regime to be one of the most restrictive in the OECD area, while broader discussions have considered the potential for a decline in Australia's credit rating. This paper uses a dynamic global general equilibrium model—GDyn‐FS—to report on the national and sectoral effects of a decline in the desirability of investing in Australia, relative to other countries. [ABSTRACT FROM AUTHOR]

Three years into the COVID‐19 pandemic, this article considers the longer‐lasting economic impacts on the Australian workforce through a gender lens. Using Australian Bureau of Statistics data, it analyses changes in employment, earnings and educational participation relative to the pre‐pandemic trends that were predicted to have otherwise occurred. Despite women's employment moving back towards pre‐pandemic levels more rapidly than men's, the pandemic also saw a widening of the gender gap in earnings and a larger fall in women's educational participation. This paper highlights the need for ongoing monitoring of labour market indicators through a gender lens to inform more responsive policy design. [ABSTRACT FROM AUTHOR]

In Australia there is limited understanding of the scale and nature of energy hardship or poverty. Energy poverty remains a concept with no clear definition and therefore no clear objectives, targets, metrics for data collection nor institutions to monitor and report on. Europe, in the last decade, has gone from limited public recognition of, and policy action on, energy poverty, to now having sophisticated quantitative measurement and monitoring tools, and institutional governance arrangements that promote transparency and accountability. In this paper, drawing on the European experience, we focus attention upon the measures and indicators of energy poverty and discuss their advantages and disadvantages. We propose institutional options for understanding and tackling these problems in the context of Australia's energy transition. [ABSTRACT FROM AUTHOR]

Our paper examines trends in gender inequalities in unpaid domestic and care work over the short‐ and long‐term in Australia, including assessing the impact of the COVID‐19 lockdowns. We use the concept of time—historical, biographical and transitional—as a framework for our analyses. Drawing on data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, we find wide and continuing gender gaps in unpaid work over the past two decades. We demonstrate that parenthood is a far greater producer and exacerbator of gender inequalities in unpaid domestic and care work than COVID‐19 lockdowns. [ABSTRACT FROM AUTHOR]

This paper provides an overview of research into the phenomenon of whether climatic factors, such as temperature and weather‐related disasters, affect the decision to migrate. As an example, we examine migration flows from 198 countries to Australia for the time span from 1980 to 2015. Our results show that temperature does not have a robust, significant effect on migration flows, while weather‐related disasters do significantly affect flows to Australia. [ABSTRACT FROM AUTHOR]

This article discusses recent research on the macroeconomic effects of fiscal policy—the theme of the 2018 edition of the Melbourne Institute Macroeconomic Policy Meeting. We review recent research findings on the effects of fiscal multipliers in normal times, during booms/busts, and in the presence of the zero lower bound. Studies on the effects of fiscal policy in open economy settings as well as contributions on the fiscal‐monetary policy mix are also considered. We conclude by outlining a few research avenues that are particularly relevant from a policy standpoint. [ABSTRACT FROM AUTHOR]

ABSTRACT: This article discusses macroeconomic policies in a low interest rate environment, the central theme of the 2017 edition of the Melbourne Institute Macroeconomic Policy Meeting. After reviewing possible causes of the decline in interest rates observed since the 1990s, we present and discuss some of the challenges that monetary and fiscal policy face in a ‘new normal’ environment characterised by a real natural interest rate close to zero. Proposals by leading researchers on how to operate in such an environment are presented and discussed. We conclude by outlining some research questions that are highly relevant from a policy perspective. [ABSTRACT FROM AUTHOR]

Macroeconomic forecasts and program evaluations of health service interventions are pessimistic about ageing populations, given their low work participation and high demand for social services. We estimate the impact of heart disease on paid work and the value of unpaid non‐market activities of the Australian elderly, using Household, Income and Labour Dynamics in Australia (HILDA) data, finding significant losses in the value of their contributions to adult care and voluntary work. Impacts on non‐market contributions of older women were more significant than for older men. A broader perspective on the value of the contributions made by the elderly is needed to enhance efficiency and (gender) equality. [ABSTRACT FROM AUTHOR]

The COVID‐19 pandemic saw governments around the world suddenly accumulate substantially higher levels of public debt. We consider the level of debt entered into by Australia's federal, state and territory governments and compare this against three metrics for debt sustainability. Using these measures, we find that current and future public debt levels sit within what is regarded as sustainable by scholarly and practitioner opinion. However, we note that recent increases in interest rates will challenge this. We conclude by outlining a range of economic, social and policy challenges arising from the new high public debt environment. [ABSTRACT FROM AUTHOR]

In the 1980s and 1990s, Australia moved from a protectionist trade policy to very open trade policies. This paper analyses the evolution of these policies in the twenty‐first century: first signing bilateral agreements in the 2000s and then participating in negotiation of mega‐regional agreements (TPP/CPTPP and RCEP). To some extent these shifts have reflected stasis in the World Trade Organisation (WTO) and its inability to make agreements on new areas. Underlying drivers of Australia's beyond‐WTO trade agreements have been the fragmentation of trade along global value chains and the emergence of new trade technologies associated with the spread of the internet. [ABSTRACT FROM AUTHOR]

We outline the case for Australia to adopt a 'New Regional Compact' focusing on working with its Pacific Island neighbours and Timor‐Leste through improved labour mobility and skilling as a complement to foreign aid and development assistance. We examine the distinctive context and evidence for this approach, related policy settings and possible ways forward. Embedded in this shift is a necessary move from a short‐term focus on temporary migration, skills shortage, and limited‐term aid programs, to long‐term foundational policies that can be a permanent feature of Australia's policy ecosystem and that of its neighbours. [ABSTRACT FROM AUTHOR]

Inflation expectations are typically considered a pivotal and causal driver of inflation dynamics over which central banks have a strong influence. Given this influence, it is important for central banks to understand how expectations are formed and how their operations influence these expectations. We describe the various ways inflation expectations are measured and used by the Reserve Bank of Australia (RBA), and then review the evidence on how Australians form their expectations. In contrast to what is assumed in standard macroeconomic models, expectations are generally not formed rationally or with full information. We close by highlighting what these findings imply for the conduct of monetary policy. [ABSTRACT FROM AUTHOR]

During the Costello era, Australian Budgets under-estimated tax receipts for the upcoming fiscal year on 11 out of 12 occasions. The Swan-Hockey era saw over-estimates of tax receipts for eight fiscal years in a row. In this way, the last two decades have seen substantial serial correlation in the errors of Budget revenue forecasts, revealing an inefficient forecasting process. We improve the efficiency and accuracy of Budget forecasts of tax revenue by incorporating National Accounts data on household saving behaviour. In particular, the adjusted R2-statistic is substantially higher. Household saving behaviour also helps to predict nominal gross domestic product growth. [ABSTRACT FROM AUTHOR]

We design a parsimonious cash flow tax for Australia and estimate revenue effects. It allows immediate deduction of all capital expenditures, denies deductions of interest payments, and compensates negative cash flows at the same rate and time as it taxes positive cash flows. It allows taxpayer timing choice on implementation over 10 years. It has incentive effects comparable to lowering the corporate income tax rate to zero. It removes distortions that artificially favour debt over equity, short‐ over long‐term investments, rents over competitive returns, large, established over small and new businesses, and conventional over innovative investments. It closes international tax evasion loopholes. Its spur to investment and timing of revenue impacts favours implementation in recession. [ABSTRACT FROM AUTHOR]

Intellectual property rights protect the fruits of investment in intangible assets, such as inventions and innovations, creative content, designs, brand recognition and reputation, through five broad arms: patents, trade marks, design rights, plant breeder's rights and copyright. All of these rights, with the exception of copyright, are administered by IP Australia. To facilitate analysis of these rights, IP Australia released Intellectual Property Government Open Data (IPGOD) on <>. IPGOD is a weekly updated, publically accessible database that provides access to 100-plus years of non-sensitive administrative data on intellectual property rights held in IP Australia's databases that are linked to Australian Business Numbers and Australian Company Numbers. [ABSTRACT FROM AUTHOR]

This paper estimates the effects of emerging mega‐regional agreements on the economy of Australia using a Computable General Equilibrium model. Scenarios considered include the 11‐member Comprehensive and Progressive Agreement for Trans‐Pacific Partnership (CPTPP) agreement, its possible enlargement to include five additional members ('TPP16') and the Regional Comprehensive Economic Partnership (RCEP) currently under negotiation. The study finds that Australia stands to enjoy real income and trade gains along both the CPTPP and RCEP paths. However, since Australia is already benefiting from its own liberal trade policies and many prior trade agreements, benefits are relatively modest, typically below one per cent of real income. [ABSTRACT FROM AUTHOR]

The opening up of access to data from the Multi‐Agency Data Integration Project provides an opportunity to fill a number of research gaps on inequality in Australia. Our paper begins the external validation of these data, focusing on what the data can tell us about the distribution, dynamics and determinants of income in Australia. It has the potential to shed new light on these aspects, but the dataset should be used with caution, taking into account some key limitations, including incomplete linkage and more limited income information for those who do not complete a tax return. [ABSTRACT FROM AUTHOR]

Neoclassical economic theory and its supply‐side account of the drivers of economic growth has been influential amongst Australian economic policymakers and advisors. In the post‐Keynesian tradition, we argue instead that aggregate demand drives economic growth, even in the medium term. In particular, the investment and innovation that depends upon that investment are mainly determined by the investment response to consumer demand. Currently, weak wages growth in Australia is weakening that consumer demand. The paper examines the causes of weak wages growth and offers solutions. [ABSTRACT FROM AUTHOR]

We construct a novel measure of uncertainty using expert monetary policy recommendation data for Australia. Our results suggest that the Reserve Bank of Australia (RBA) tends to lower the cash rate when expert uncertainty is high. This result is robust to using other uncertainty measures. [ABSTRACT FROM AUTHOR]

Abstract: The Longitudinal Surveys of Australian Youth (LSAY) follow several cohorts of young Australians as they move through secondary school, into further study, work and other destinations. The LSAY datasets provide an evidence‐based capacity for sophisticated exploration of policy and research questions through insights into individual changes, transitions and trajectories across the life‐course of young Australians. This article aims to provide an update on the progress of LSAY, including its history, evolution of the sample, sample maintenance activities, updates to the information collected, developments to the survey, the many uses that have been made of the data and possible enhancements. [ABSTRACT FROM AUTHOR]

This article introduces the Policy Forum. It contains: (i) a brief overview of the fiscal policies introduced to deal with COVID‐19 and their impact on Australia's economic performance; (ii) summaries of the articles in the Forum; and (iii) suggested learnings for policymaking in future crises. [ABSTRACT FROM AUTHOR]

We present details of the design and implementation of the 2020–2021 JobKeeper program and review the literature on its impacts. JobKeeper stimulated the macroeconomy and restrained job loss in the downturn. But because the program was not narrowly targeted, the cost per job saved was high and the impact most likely regressive. However, it would not have been possible to devise and implement a more targeted program in the available time, and as it was, JobKeeper was arguably implemented later than needed for maximum effectiveness. We therefore recommend that Australia consider establishing a short‐time work program for use in future recessions. [ABSTRACT FROM AUTHOR]

The relationship between housing quality and energy disadvantage over the long run is a complex interaction of growing interest. This work navigates through conceptual definitions and datasets to highlight gaps in monitoring and evaluating energy disadvantage, particularly the role of housing in perpetuating or mitigating energy disadvantage. We find that in Australia there is no agreed‐upon definition or metrics for energy poverty or energy hardship, nor a panel or longitudinal housing stock energy efficiency dataset and discuss options for remediating this. [ABSTRACT FROM AUTHOR]

We review a body of literature that addresses the incomes of visual artists and their participation in the labour market. It is clear that the level and composition of visual artists' incomes varies widely, as does their engagement in different forms of employment. The lack of a consistent definition of an artist and a lack of consistency in income sources included in current data collection presents challenges for researchers. The focus of our research is on the economic status of visual artists in Australia, and we identify a number of considerations that might inform policy responses to their financial position. [ABSTRACT FROM AUTHOR]

Energy poverty is a temporary condition, yet a non‐negligible share of the Australian population suffers persistent energy disadvantage. Using the Household, Income and Labour Dynamics in Australia (HILDA) survey, we observe that single individuals, single‐parent households and those with a disabled household member are at high risk of persistent energy poverty. This is also true for non‐working individuals and immigrants from non‐English‐speaking countries. Nevertheless, highly educated individuals, those living in metropolitan areas and homeowners are less likely to persistently experience energy poverty. Government investment in energy efficiency is crucial to reduce electricity bills and have healthier homes. [ABSTRACT FROM AUTHOR]

This article focuses on the challenges facing superannuation, the income replacement pillar of Australia's retirement income system, as it matures. We discuss four questions: In an era when households are making critical and complex choices that most have never previously confronted, how should policy-makers and private providers guide choices? How should superannuation be taxed? How should the drawdown phase be structured? And to what extent will the Superannuation Guarantee be able to meet the objective of providing retirement income to substitute or supplement the age pension? This article attempts to provide perspective on each of the issues and concludes with a statement of research need. [ABSTRACT FROM AUTHOR]

The article focuses on the economic growth and employment in Australia. Topics discussed include a forecast in economy showing slow development of multi-factor productivity (MFP), maintaining full employment by investment contraction, and requirements for orderly adjustment (OA) like improving international competitiveness. Also it mentions fall in real wages, adjustments in internal prices to achieve OA and ways to deal with currency devaluation to improve productivity.

The past decades have seen rapid changes in societal attitudes and policy surrounding members of the LGBTIQ community, however this community continues to experience adverse social and economic outcomes relative to their cisgendered heterosexual counterparts. Understanding the LGBTIQ data landscape is essential to promote scholarship in this space and highlight avenues for future data collection. Here I provide an overview of the 17 national data surveys in Australia that capture information on either sexual or gender diversity and are either repeated or longitudinal samples. For each dataset, I provide details on questions pertaining to sexual and gender diversity, indicative sample sizes and age ranges, scope of survey, and data custodians. Altogether, I find thatcollection of information on sexual and gender diverse (SGD) populations in Australia is poor and terminology varies widely. Only seven datasets capture information on both sexual and gender diversity and, of these, none are nationally representative, and only one is a longitudinal sample. Altogether, this review highlights the need for large‐scale, representative and longitudinal data capture of SGD populations in Australia. [ABSTRACT FROM AUTHOR]

We present the first estimates of intergenerational wealth mobility for Australia. The rank correlation is 0.253, compared to 0.306 for the United States using comparable methods. This correlation varies greatly by child age when wealth is observed, from 0.1 before age 30, to 0.5 after age 40. This sharp increase with age is stronger than for other countries, is not explained by sample selection bias and is not specific to particular types of wealth. We also argue that neither income mobility nor wealth mobility, as operationalised in empirical work, align neatly with the wealth concept in the Becker & Tomes framework. [ABSTRACT FROM AUTHOR]

This article examines the benefits and costs of Australia's labour migration policies. While previous economics studies have demonstrated the efficiency‐related benefits of these policies, this article analyses the consequences for worker voice and equity, which employment relations scholars have identified as important labour market policy goals. We argue that the efficiency‐related benefits of labour migration policy reforms, particularly the expansion of temporary visa schemes, have been generated in part by barriers to temporary migrant workers' access to representation and social rights. This situation has contributed to an increase in the underpayment and mistreatment of temporary migrant workers by employers. [ABSTRACT FROM AUTHOR]

We describe the labour market for Uber drivers, the first detailed study of a gig economy market in Australia. Uber drivers' characteristics, reasons for driving with Uber, hours of work and driving schedules, earnings and job satisfaction are analysed, using both administrative and survey data. Uber drivers have diverse pathways to the job, with the objective to earn supplemental income most important in Australia. Total hours and timing of work differ substantially between drivers. Drivers express high satisfaction regarding job flexibility but lower satisfaction about pay. Hours worked and job satisfaction depend importantly on a driver's pathway to the job. [ABSTRACT FROM AUTHOR]

The increasing availability of large-N datasets on students, schools and student achievement has produced an explosion of research in education economics over the past 20 years. In this data survey, we first review the micro-level education datasets presently available around the world, focusing on their strengths and data access protocols, and we highlight samples of research by economists that have drawn upon them. We then discuss Australia' s forays into 'Big Data' in education, with our main objective a description and assessment of the national school data recently made available to researchers through the Australian Curriculum, Assessment and Reporting Authority. [ABSTRACT FROM AUTHOR]

Although immigration debates in the popular press sometimes focus on the perceived negative aspects, immigrants may actually stimulate innovation, thereby promoting job creation and enhancing productivity. Although there is an emerging international literature on the impact of migration on innovation, Australian studies are limited. Given the importance of net immigration to Australian society, this is an oversight. In this article, recent developments in the international literature on the migration-innovation relationship are critically reviewed and their implications for the debate in Australia are considered. Moreover, some ideas on how to improve the evidence base for policy-making in Australia are proposed. [ABSTRACT FROM AUTHOR]

This article presents an overview of the first three waves of data collection for Ten to Men: The Australian Longitudinal Study on Male Health (TTM). TTM is Australia's first national and representative longitudinal study of men aged 10–55 years who resided in private dwellings at recruitment. Findings address knowledge gaps and build the evidence base on male health to inform policy and program development. This article provides an update on the study's progress; it details the study's broad methodology and provides a brief overview of the measures available, potential uses and how data can be accessed. [ABSTRACT FROM AUTHOR]

The downturn in Australia's labour market from 2008–2018 was reflected in dimensions other than unemployment. We use the Household Income and Labour Dynamics in Australia data set to explore one key dimension—occupational choice. Using an occupational ranking (AUSEI06) based on earning potential and education level, we show young graduates (aged 20–35) found work in lower‐scored occupations after 2010. We examine potential heterogeneity of the occupational outcomes using Markov transitions between quartiles of the occupational distribution. We find the likelihood of transitioning to better quartiles worsened over the 2001–2018 period, suggesting poor initial outcomes can have long‐term effects on one's occupation. [ABSTRACT FROM AUTHOR]

Foreign direct investment (FDI) is foundational to economic growth. Despite this, the Australian empirical literature is limited. Therefore we examine the empirical determinants of Australia's inflow of FDI to understand the factors that motivate FDI. Using autoregressive distributed lag models, the study also highlights how these determinants change across time. While inward FDI can be explained by various theories it is most effectively understood by Dunning's Ownership, Locational and Internalisation framework. Therefore, the factors most important in Australia to attracting FDI are monetary policy, productivity, a competitive tax structure, labour market flexibility and costs of trade and investment. [ABSTRACT FROM AUTHOR]

An introduction to the journal is presented which discusses various papers published within the issue, including one on political influence as a major cause of wealth inequality in Australia, one on corporate influence in political decision-making and another on income inequality trends in Australia.

This article presents an argument for creating a universal entitlement to aged care. Following the Royal Commission into Aged Care Quality and Safety, significant reform of Australia's aged care system is needed. The current policy of rationing care must end, because it leaves too many older Australians without the level of care they need. It should be replaced with an aged care system that is underpinned by an objective to support the rights of older Australians, including their right to independently assessed, government funded, reasonable and necessary needs‐based care. This more equitable approach will require a massive boost in government spending to ensure all older Australians get the care and support they need, when they need it. [ABSTRACT FROM AUTHOR]

The Final Report of the Royal Commission into Aged Care Quality and Safety (Commonwealth of Australia 2021) highlighted the challenges in developing a sustainable financing system for aged care in Australia. The report recommended additional funding both in the short term and longer term so as to provide an adequate level of aged care quality for older Australians, including exploring an actuarially based contributory social insurance scheme for aged care. Sustainable financing of aged care requires a balance between government tax‐based financing, individual contributions during working life through an aged care levy, copayments for aged care costs for those receiving aged care and means testing for these copayments. There should be a role for private market insurance and financing to supplement government financed aged care support. [ABSTRACT FROM AUTHOR]

No. While the COVID‐19 crisis has required a dramatic increase in debt‐financed government spending, in the current conditions the benefits from this debt are unusually high and the costs unusually low. While conditions can change, the Australian Government can right now hedge against these risks by lengthening the maturity structure of government debt, even at the cost of a modest increase in its current servicing costs. [ABSTRACT FROM AUTHOR]

We, as taxpayers, face challenging problems in assisting the well‐being of old people mainly because preparing for and living through old age is a risky business. Through government, taxpayers can provide some insurance against the risks of old age, especially the risk of bad health and the risk of a long life. However, the ageing population suggests that maintaining this support will require increased taxation. This article quantifies this challenge for Australia and concludes that although increased taxation may be required it will be easily affordable from the much higher incomes generally received due to the secular increase in productivity. [ABSTRACT FROM AUTHOR]

We develop a multivariate time series model of employment in 19 sectors for Australia. We use this model to determine the long‐run effect of a 1% increase in economic activity in any chosen sector on aggregate employment. Our findings point to manufacturing and construction sectors as those that generate the largest positive spillovers for the aggregate economy. Moreover, we provide an interactive web‐based app that produces our model's forecasts based on any user‐specified scenario. As the restrictions associated with the COVID‐19 pandemic evolve, the sectoral employment multipliers together with these interactive tools will provide useful information for policymakers. [ABSTRACT FROM AUTHOR]

Using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, and after restricting attention to employees, we observe an increase over time in the non‐standard employment share, all of which is concentrated in the period since 2009. Further, we find clear evidence that employees in non‐standard forms of employment have experienced relatively low rates of growth in hourly wages when compared with permanent full‐time employees. Nevertheless, decomposition analysis suggests that changes in workforce composition by employment type have had a very small (and insignificant) impact on the overall rate of wage growth in recent years. [ABSTRACT FROM AUTHOR]

An introduction is presented which discusses topics within the issue including Australian macroeconomic policies, the measurement of uncertainty, and the loan-to-value ratio (LVR) policy in New Zealand.

Economic activity in Australia slowed considerably in 2018–19, with domestic demand growth halving and unemployment rising. Consistent with the slowdown, both consumer and wage inflation have remained weak. A synchronised growth slow‐down was observed across major economies, to some extent underpinned by the on‐going US–China trade war. Central banks have responded to weak growth by cutting rates. The US Federal Reserve cut its target for the federal funds rate three times in 2019, as did Australia. To date, record low Australian interest rates have been associated with additional housing‐related debt and asset price appreciation. [ABSTRACT FROM AUTHOR]

We revisit the evidence on the effect of changes in household wealth on consumption using a panel of Australian states. We find that a one per cent increase in the value of housing wealth increases consumption by about 0.16 per cent in the long‐run, with half of the response occurring within two quarters. The size of this response has been stable over time and largely reflects changes in spending on motor vehicles, durable goods and other discretionary items. We then run counterfactual scenarios using the Reserve Bank of Australia's macroeconometric model, MARTIN, to assess the macroeconomic effects of changes in household wealth. We show that increases in household wealth supported household spending between 2013 and 2017, when growth in disposable income was weak. [ABSTRACT FROM AUTHOR]

Following decades of skirmishes, Australia's relationship with the European Union (EU) has finally come of age. With the commencement of negotiations for a Free Trade Agreement, the outlook is promising for enhanced cooperation. Yet there are distinctive—and at times diverging—hierarchies of interests. This article argues that, although the EU and Australia regard each other as like‐minded partners, their interests and domestic pressures do not necessarily denote comprehensive convergence. This is due to the burden of memory, divergent concerns and values, some mutual neglect and an element of mutual misunderstanding. [ABSTRACT FROM AUTHOR]