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The article presents information on infrastructure spending and unemployment in Australia. The Australian government's policy package had several components. The first was a recognition that high economic growth was required if significant inroads into unemployment were to be achieved. Given the government's beliefs about the likely outcomes for labour productivity and the labour force participation rate, it was thought that a real growth rate of 4.8 per cent would be required to achieve the target unemployment rate of 5 per cent by 2001. The Green Paper and the subsequent White Paper were pretty vague as to exactly how such a long stretch of high economic growth was to be achieved, placing a lot of faith on microeconomic reform and improving the quality of labour through training reform. However, it was also recognised that high growth by itself was not sufficient, and that a policy of active labour market programs directed at the long-term unemployed and those at high risk' of becoming long-term unemployed would be necessary to reduce long-term unemployment. The Job Compact was an extensive raft of active labour market programs which included an expanded wage subsidy scheme, training programs and case management of the chronically unemployed and which placed an obligation on targeted individuals to participate in the scheme to retain unemployment benefits.

The article presents information on path to full employment in relation to Australia. Employment arises because there is a lack of collective will. It does not arise because real wages are too high or aggregate demand too low. These are only proximate causes, if causes at all. The lack of collective will has been the principal casualty of the influence of rationalism. In this paper the proximate cause of unemployment is shown to be a persistent deficiency of aggregate demand. But the underlying cause is that the rise of free market ideology has meant that people are no longer prepared to bear some costs themselves to ensure others have employment. The only way people will return to full employment is if the costs and benefits of economic activity are shared. The public sector must be the vehicle to restore the collective will. In this paper, it is argued that the solution to persistent unemployment is for the Government to act as a Buffer Stock Employer, plus the reintroduction of incomes policy. Further deregulation of the wages system cannot be justified.

This article examines the prices of housing in Australia and recommends several policy options. This paper draws on a collaborative research program that examined Australia's housing affordability problem. The author contends that the problem is not due to current factors but has arisen from many decades of policy. She also states that renters in housing stress is a significant problem and needs to be addressed through a reorientation of government policy. It should encourage increasing the supply of rental housing.

The article comments on the article "The Path to Full Employment," by William F. Mitchell and Martin J. Watts. In their paper, Mitchell and Watts (referred to from here on as MW) claim that the proximate' cause of high unemployment in most economies has been a persistent deficiency of aggregate demand', which in turn has been the result of the application of excessively restrictive fiscal and monetary policy over the last two decades. While the paper ranges over a number of related issues and themes, in the short space allocated to this commentary, the author concentrates on the merits and drawbacks of their Buffer Stock Employer (BSE) scheme, which MW claim will solve the unemployment problem without creating significant inflationary pressures. The first point that can be made is that the BSE model is nothing new indeed it is nothing more than a public sector job creation program, similar in purpose to the Regional Employment Development Scheme of the 1970s, the Community Employment Program of the 1980s, and the New Work Opportunities component of the Job Compact. The main difference is that the scheme is to be a permanent feature of labour market assistance rather than a temporary measure.

The article presents information on Australian government policy for full employment. Creating more jobs is the key to reducing Australia's too high level of unemployment and moving towards full employment. The authors will not dwell on the definition of full employment. Perhaps a target rate of unemployment, like the 5 per cent of Working Nation, might be helpful in the medium term. It may be possible, however, in the long term, to reduce unemployment to lower levels. There will need to be a focus on raising aggregate employment supplemented by special initiatives for those with lower skills who are disproportionately represented among the unemployed. The path and underlying causes of unemployment in Australia since 1945 are reviewed to provide a background for proposed solutions. The analysis indicates that faster economic growth and constrained average labour cost growth clearly have to be major parts of a successful strategy to increase employment. However, special initiatives will be required to raise the employment prospects of those with low skills who are heavily represented among the unemployed. The paper considers key elasticities and the order of potential employment gains from restraining real wages, especially of the low skilled. It also considers options for changing the tax and social security system to more directly and explicitly meet social equity goals than can be achieved through the wage system, in order to allow the wage system to be more efficient in creating employment.

The article presents information on unemployment in Australia, its prospects and policies. Everyone knows that it has proved a difficult problem to solve. The problem of mass unemployment in Australia arguably has now persisted for a longer period than during the Great Depression, yet it appear to have made little progress in solving the problem. The contributions to this Australian Economic Review Policy Forum are intended to stimulate debate on appropriate solutions to the problem of unemployment in Australia. To set the scene for the discussion of policy proposals this paper reviews some of the main features of unemployment in Australia today. Section 2 describes the evolution and distribution of unemployment in Australia. Section 3 considers prospects for unemployment over the medium term in Australia. This analysis suggests that in the absence of policy reform unemployment is likely to remain at an unacceptably high level over the next three to five years. Section 4 presents a general framework for classifying types of policies for unemployment and for evaluating those policies, and provides a brief overview of the articles in this Policy Forum. Australia's prolonged experience with high rates of unemployment has meant that long-term unemployment has become an important issue of concern for policy-makers. In May 1997 about 240 000 persons had been unemployed for over a year. This represented thirty per cent of the total group of unemployed persons.

Claims of an infrastructure crisis lack definition, and fail to provide evidence that investment projects that would generate an economic return, including both private and social benefits, are not being funded. This paper shows how setting economic prices for energy, water, transport and communications will provide a better guide to the optimal amount of future infrastructure investment than the likely responses by proponents of an alleged infrastructure crisis. [ABSTRACT FROM AUTHOR]

Provides a critique of the West Committee's report on higher education funding in Australia. Issues criticized on the report; Economic argument for government funding; Retreat from policy making.

This paper discusses trends in poverty in Australia over the last two decades, as indicated by changes in the number and composition of income units with incomes below the Henderson poverty line as well as by trends in the circumstances of the population in receipt of social security payments. This analysis suggests that there have been significant changes in the nature of poverty in Australia, which has increased among those of workforce age. Families with children have been particularly affected by these developments. The paper describes the development of policies designed to achieve the govemment's pledge that by 1990 no child need live in poverty. Despite the usefulness of the Henderson poverty line in identifying trends in economic vulnerability, the paper identifies a number of practical objections to using this indicator to assess the total effect of government initiatives. The paper concludes with a discussion of a broad approach to poverty alleviation, which would include income support, labour market and community services policies. [ABSTRACT FROM AUTHOR]

The article comments on the article "Infrastructure Spending and Unemployment: Government Responsibility for Growth and Jobs," by Peter Kenyon. The current rate of unemployment in Australia is excessively high. The Australian population would benefit greatly from government economic policies that reduce the rate of unemployment. Peter Kenyon argues in his paper for an increase in publicly funded infrastructure projects. Such a policy would be, in his view, the quickest and surest policy to deal with unemployment. In arguing for this policy, Kenyon observes that studies have shown that public sector infrastructure creates positive externalities for the private sector. Furthermore, Kenyon argues that, in Australia, productive infrastructure projects are there for the investing. This he infers from his view that the decline in Australia in public investment from 8 per cent of GDP in the 1960s to about 4.5 per cent of GDP now was caused by `the short-term policy of government budget deficit reduction' and not by fewer projects passing the test of cost-benefit analysis. Kenyon points out that this decline in public investment has not been accompanied by an offsetting increase in private sector investment. These arguments suggest that an increase in public investment would be productive.

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]

The author reflects on a water shortage being faced in Australia and on governmental policies that have been enacted in an attempt to improve the country's water supply. Actions that have been taken by several organizations in an attempt to improve the country's water supply are discussed, including the Australian Conversation Foundation (ACF), the Business Council of Australia (BCA) and the National Water Commission (NWC).

This article focuses on the changes in the monetary policy of Australia and the U.S. for the period since 1985. The average number of weeks between policy changes was 8.9 weeks for the United States and 16.6 weeks for Australia. Australian monetary policy was changed less frequently than that of the United States. In the pre-announcement period the average number of weeks between policy changes for Australia was 10.7 compared with 5.2 weeks in the United States. In the announcement period the average number of weeks was 18.2 weeks for the United States and 26.6 weeks for Australia. Australian monetary policy has been changed less frequently than US monetary policy throughout the period, although the relative number of changes has dropped slightly in the post-1990 period.

This article focuses on the Australian population policy. Population policy is a policy for a very long term. As an example, one prepares for a large increase in the aged proportion of the population that will occur mainly between 2020 and 2040. Ageing is the product of relatively high birth rates from 1950 to 1970 followed by low birth rates since 1970. Hence, a policy issue in 2030 derives from births 70 years and more beforehand. If the first priority of a population policy has been achieved, the debate shifts back to a debate about population size.

The pricing of access to electricity transmission networks in Australia is currently under review. Several options have been proposed including those based on nodal pricing and the assignment of transmission rights contracts. As most of the marginal costs of transmission are recovered through wholesale electricity prices we focus on the key issue of regulation and investment incentives. We find that current options are unlikely to be adequate in terms of encouraging socially optimal levels and timing of new transmission investment. As an alternative, we propose a regulatory scheme, based on a related idea by Sappington and Sibley that can overcome this problem. Our scheme can potentially generate first best results and is readily applicable given the current institutional structure of electricity markets in Australia. [ABSTRACT FROM AUTHOR]

The author reflects on research regarding water reform that was issued by the Australian Productivity Commission. Topics relating to water reform which were discussed in the research include the competition that exists for water in urban areas, trade between rural and urban areas and pricing. The impact that population growth and a drought have had on water issues in Australia is discussed.

Comments on the paper 'The Development of Government Policies on Poverty and Income Distribution,' by Meredith Edwards and Peter Whiteford, about poverty policy-making in Australia. Major trends in poverty; Segment of the population living in poverty; Flaws of the authors' application of the Henderson poverty line in measuring poverty.

Growing debate on economic inequality in the West has refocused discussion on whether economic elites have too much influence on public policy-making. The article highlights the extent to which public policy in Australia has been captured by corporate interests and other economic elites in recent years. This raises questions about the quality of public policy now being generated in key areas of reform. It also raises questions about the sustainability of public support for policy constructed by, and on behalf of, narrow corporate interests. [ABSTRACT FROM AUTHOR]

This article discusses structural changes and emerging policy issues in the Australian petrol industry. The evolution of wholesale markets is a globalisation story: rapid economic growth in countries like China and India is bringing global crude and petrol prices to historical levels and creating significant changes in Australian petrol refining and distribution. In the retail market, recent anti-trust cases have centred on information technology, specifically online platforms that aim to inform firms and consumers of petrol prices. I discuss these and other developments that are creating new challenges for the Australian Competition and Consumer Commission. [ABSTRACT FROM AUTHOR]

Immigration has conditioned the peopling of Australia. This article examines the evolution of Australia's population as influenced by immigration, what the impacts of population change have been for the economy, society and environment and what options exist to influence this process. The desirable course of policy is examined. A central role for immigration and the enhancement of its management and of complementary policies in building a worthy future for Australians are proposed. The contribution of past economic analysis to understanding of these issues and to informing policy settings is discussed and work still required in analysis and policy is identified. [ABSTRACT FROM AUTHOR]

The Intergenerational Reports have helped lengthen the horizon of public policy analysis in Australia, enabling governments to focus on the longer term implications of policy changes, particularly their fiscal implications. Nonetheless, it is important to note that the reports have examined fiscal sustainability from the Commonwealth's perspective, notwithstanding that fiscal sustainability is also an issue for the states and territories. Additionally, the reports have not incorporated contingent fiscal liabilities, notwithstanding their relevance to fiscal sustainability. [ABSTRACT FROM AUTHOR]

Despite the passing of the carbon price legislation, implementation of climate policy must confront a number of challenges. These include the uncertain nature of benefits from the policy, uncertainty surrounding the cost of abatement within Australia, uncertainties about international action and challenges in the interaction between policy instruments (for example, between the carbon price and large subsidies to renewable energy). Each of these issues implies a substantial empirical challenge for the Australian Government and the independent agencies charged with implementation. Effort should be focused on increasing the knowledge base, rather than relying on simplified scenarios from a narrow range of economic models. [ABSTRACT FROM AUTHOR]

The implications of Australia's unilateral carbon-pricing plan for its energy-intensive, trade-exposed industries are analysed. While a priori arguments for protecting such industries make good theoretical sense, empirically significant levels of support for such protection centre on the non-ferrous metal industry alone. [ABSTRACT FROM AUTHOR]

This article explores whether proposed changes to the regulation of synthetic securitisation in Australia are sufficient in light of the Global Financial Crisis. Synthetic securitisation is specifically chosen as an object of study, given the relative ease with which it can be over-used. The article examines several theoretical problems with securitisation, which entice corporations into excessively risky behaviour. Contrary to popular belief, it is established that agency issues are not a serious problem with securitisation. Instead, managerial behavioural biases are shown to be most problematic. The article recommends stricter capital adequacy relief requirements, which would provide a disincentive for excessive risk-taking by potentially over-confident managers. [ABSTRACT FROM AUTHOR]

This introduction outlines the main choices that the Australian Government had in designing a carbon price policy. It concludes with an assessment of the findings of the articles in this Policy Forum. [ABSTRACT FROM AUTHOR]

The article presents the findings of a survey on first home buyers' (FHBs) support schemes in Australia. The data comprises of gross and net rates of assistance provided by cash grants and stamp duty concessions to first-time owner-occupiers from 1990 to 2010. The survey investigates the history of several forms of government assistance to FHBs and the derivation of time series data for the gross rates of assistance afforded by schemes directed towards FHBs.

The article reports on the proposal to add special taxes on energy-dense food to reduce the prevalence of obesity in Australia. It states that market failures were noted with the decision on food consumption by the government wherein it presents several graphs depicting marginal costs of the market. It mentions that the market test revealed no significant findings hence the special added tax was not implemented.

Distributional and second-best problems of implementing efficiency based demand management of road use in Australian cities are addressed. Both road use pricing and parking policies are considered. Failure to price roads and parking spots efficiently contributes to excessive travel and to excessive urban expansion. A key policy concern is to promote demand management acceptability by offering transportation alternatives and by making explicit the sources of efficiency gain from revenue neutral road charging policies with double-dividend advantages. Second-best policies of restricting land releases on city boundaries to encourage more compact city development may be inferior to policies of pricing major roads, cordon pricing and demand based parking policies. [ABSTRACT FROM AUTHOR]

The article examines the government policy for obesity in Australia. It characterizes the current policy for obesity in the country as a collective and systematic failure to alter diet, physical activity and culture despite public initiatives by organizations such as International Obesity Task Force and World Health Organization. It demonstrates policy leverage points at which all regulations has potential to prevent obesity problem in the country. The problem on obesity requires the collaboration of many disciplines including from the health sciences such as nutrition science.

With important developments over the past two decades in Australian retirement income policy, projected future outcomes-for the public purse,for the national economy and for the future retired-have received considerable attention. This focus on the future should not, however, cause us to lose sight of the present. While the major changes in retirement income policy outcomes will not occur for some decades, the picture for current and recent cohorts of retired people is not static. This article begins with an account of the important policy developments since the 1980s in the Australian retirement income arena-the Australian retirement income system still differs radically from that in most other countries, in relying heavily on a means-tested income maintenance system, rather than on social insurance. The outcomes for current and recent cohorts of retired people are then examined from two perspectives. The first perspective is an examination of the incomes of the aged in the mid 1990s and of trends over the 1980s and 1990s-including consideration of changes in the level, composition and distribution of aged incomes. The second perspective is an international comparison of the incomes of the aged. [ABSTRACT FROM AUTHOR]

The merger factor has been important in the assessment of a number of significant mergers by the Australian Competition and Consumer Commission (ACCC) in the past few years. This article examines the way in which the ACCC and the judiciary have considered the concept of vigorous and effective competition in merger analysis. In its Merger Guidelines the ACCC discusses the vigorous and effective competitor concept in the context of the "maverick firm." The guidelines indicate that the ACCC will pay particular attention to the behavior of firms where "maverick" relates to behavior of particular firms which undermines any attempts between other firms in the market to coordinate the exercise of market power. This merger factor examines the actual behavior of the target firm pre-merger and then attempts to evaluate likely future conduct with and without the merger. The ACCC would place considerable emphasis on the ability of the firm being acquired to be a vigorous and effective competitor when regulations are lifted. Merger proposals in industries where deregulation is proposed need to be considered very carefully to ensure that they are not an attempt to reimpose a market environment which deregulation is attempting to change.

Reports on the results of a survey comparing the external benefits of university degree programs in Australia. Background information on Higher Education Contribution Scheme (HECS) in Australia; External costs and benefits created by universities; Data utilized on the survey; Details on the results.