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The private health insurance sector is one of the most regulated sectors in Australia. The Private Health Insurance Incentives Scheme, along with community rating, is intended to make private insurance equitable, profitable and popular. We argue that the subsidy to health insurance ought to be a very effective tool for increasing insurance–but it was ineffective because community rating was ineffective. Using data from the Household Expenditure Survey we find that despite community rating rules which prohibit age-adjusted premiums, young adults paid considerably less for their insurance than older adults. We conclude that insurers circumvented community rating through plan design, screening older consumers into more expensive plans. We also find that the penalty of 2 per cent per year for delaying insurance, introduced as part of the lifetime cover plan, is too low to be effective. We reflect on the New Zealand experience, where a completely deregulated insurance industry continues to be profitable and enjoys similar rates of coverage to those of Australia, and we ask whether Australia too could not benefit from complete deregulation. [ABSTRACT FROM AUTHOR]

The purpose of this article is to study relative trends in total factor productivity (TFP) between the Australian and New Zealand manufacturing sectors from 1986 to 1996. Since 1984 both economies have undergone major structural changes with varying degrees of speed and intensity. We use the Malmquist index to measure TFP growth and decompose it into an efficiency change and a technical change component. This decomposition provides extra insight on accessing relative productivity trends during a period of economic reform. The results indicate the Australian manufacturing sector exhibits better rates of individual factor productivity performance while multifactor productivity is estimated to be higher in New Zealand manufacturing. TFP growth in New Zealand is driven by technical rather than efficiency change. In fact, the New Zealand manufacturing average rate of efficiency change is estimated to be negative over the sample period. [ABSTRACT FROM AUTHOR]

Revolutionary changes have occurred in the conduct of monetary policy in New Zealand and Great Britain over the last decade; Australian arrangements, too, have changed, albeit in an evolutionary fashion. In all three countries the description of the central bank's objectives is effectively in two parts: an Act of Parliament that sets out the constitutional and legal basis for the central bank and spells out general objectives; and an agreement or remit that gives more precise content to those objectives. In both Australia and Great Britain operational decisions on interest rates are taken by a nine-member committee, whereas in New Zealand the burden of decision making rests entirely on the Governor. Holding the central bank to account is not as straightforward as it looks. Given the fact that all three have numerical inflation targets, it would seem that all that is required is to look at inflation outturns and evaluate whether the targets have been achieved. Ex post accountability also needs to be complemented by ex ante accountability in which the central bank's view of the economic situation is compared with that of independent outsiders.