Econ243 Assessment
Econ243 Assessment
Econ243 Assessment
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ECON 243 Assessment
The regime of labourist protectionism first came to the fore before federation in Australia. However,
it is from the beginning of the 20 th Century that the larger influence that state and Federal
Governments had on the economy became more noticeable. It is during this time that the tariff
system was introduced, the Commonwealth Court of Conciliation and Arbitration was established, as
was the basic wage, statutory marketing authorities and home consumption price schemes.
The regime of labourist protectionism was a set of policies and practices that were directly centred
on protecting the living standards of working class white males in the Australian society, while
excluding others such as Aboriginals, non-British migrants and women. The way in which labourist
(agriculture, mining of natural resources, etc) and reduce the threat of foreign trade and investment.
This is known as ‘the historic compromise between capital and labour’, as the prospect of potential
gains in capital and a larger, more productive labour force that would be available due to the access
of foreign markets, was foregone in order to secure a high quality standard of living for the working
class white Australian male. It was possible for the Government to engage in this labourist
protectionism, as Australians earned high incomes due to the primary sector exports, such as wool,
Labourist protectionism also ensured that the Australian standard of living was protected from any
disturbances associated with Australia’s involvement in the international economy. This ensured
that workers’ wages and standard of living were upheld and therefore ensured a good quality of life.
The main way that the Government ensured that the primary sector was regulated was through the
imposition of tariffs on imported goods, which ensured that imported goods were sold at an
elevated price, and consumers would therefore elect to purchase Australian products. Although over
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the course of over half a century, there were variations of the labourist protectionism policy put in
place, during the 1980s in Australia, the country took a substantial leap forward with regards to
international involvement as it elected to deregulate markets, and open its doors to the looming
The main reasoning behind the bold choice of becoming a part of the trend of globalisation was to of
course move ahead with the changing times in economic context and ensure that Australia
established itself as an economically competitive nation on a global scale. To ensure that Australia
was a strong economic force, the Australian Government had to “open their minds” to the prospect
practices and innovative technologies in manufacturing and other industries that were available in
other overseas nations. Globalisation also exposed Australia to a large more competitive overseas
market, which, in itself, encouraged producers to seek more innovative, efficient, cost-effective
alternatives regarding production. It also created the need for a larger more expansive labour
market, which could only be met by the hiring of individuals from the overseas labour force.
Another legitimate reason for the Government to opt to embrace the concept of globalisation is also
because, as time has slowly passed, the trends in export has shifted from primary sector products to
the increasing trend of the export of services. This is partially due to the slow depletion of some of
the finite natural resources, such as gold over a considerable time. As the Australian Government
realised that they could not rely solely on the mining and other primary industries sectors to
generate wealth for the nation, the most rational solution was to expand into other industry sectors
and markets and attempt to forge a competitive advantage in other areas, and also to focus on the
renewable resources of the primary sector for exports, especially wool, beef and crops such as
wheat. In the beginning the Australian public was dubious of the switch to global competitiveness, as
there was the fear that products from overseas markets could penetrate and saturate the Australian
market and leave the Australian workers with no employment opportunities and prospects for the
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future. However, this has not been the case. As the Australian Government embraced the notion of
globalisation, this allowed a more competitive stance to be taken by Australian farmers and
producers and therefore enabled for producers to offer a more competitive price for consumables.
This move towards globalisation has proved to be a most effective means of establishing an
international competitive advantage in many sectors of the Australian economy, and is crucial in
aiding in maintaining adequate wages that are required in sustaining a high standard of living for the
Australian community.
Explain the impact of deregulation on one industry of the rural sector over recent years. Include a
The ways in which deregulation have impacted upon the dairy industry of the rural sector of the
Australian economy in 2000 varied from farmer to farmer as each farmer’s dairy contributions
differed, mainly due to farm size and composition. However, there was a general consensus that
deregulation of the industry led to a drop in cash income for many Australian farmers. When the
dairy market in Australia was regulated, it offered a degree of financial security for farmers and
ensured a supply of fresh milk all year round, as they operated on a quota system, where farmers
were paid a certain amount for every litre of milk they produced until they reached the quota limit,
and then every litre produced over the quota limit received a drastically reduced price per litre of
milk. Therefore, under the quota system, farmers were able to earn sufficient cash income for their
milk products. However, there was, after a public survey, a discovery that farmers in the state of
Victoria were suffering, from the restriction of competition in the dairy industry, which therefore
constricted their income prospects. Therefore, Victoria was able to lift the regulations on the dairy
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industry. However, other states discovered that there was a benefit from sustaining the regulation
This served as a large disadvantage as other states discovered the lack of sustainability so long as
Victoria continued with the deregulation of the industry, as the free interstate trade would see many
businesses in other states opt for purchasing Victorian milk products, as the prices were cheaper and
the supply was constant. It was then that the other states opted for reforming and deregulating the
dairy industry with the aid of the Australian Government, and although the government was aware
of the instant impact of deregulation on the industry, however, if deregulation did not take place
then a substantial number of farmers may have had to permanently stop production of milk, as the
demand of dairy products from states outside of Victoria would diminish. However, the severity of
the impact of the deregulation of the dairy industry could not be predicted so it did come as quite a
large shock to many farmers, especially in NSW, who experienced quite a drastic drop in income
caused by deregulation of the industry. The Australian Government therefore introduced the Dairy
Structural Adjustment Program in an attempt to aid reform in the industry. However, dire conditions
for dairy farmers led to many opting for receiving exit payments that the adjustment program
Therefore it proved to be quite beneficial that the Australian Government provided subsidies for
dairy farmers, as without this financial support and assistance, many of the farmers would have had
a severe difficulty in acclimatizing to the new market conditions surrounding the industry. The need
for the Government provisions indicates that deregulation was a very difficult process to predict the
outcomes of and therefore, was hard to plan for with regards to reform. Now, as the dairy industry is
not a regulated industry, prices that farmers receive for milk production are determine, mainly, by
the international prices of milk. Research has indicated that Australian dairy farmers receive a low
price for milk, judged by world standards. And ‘therefore have to run very efficient production
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systems’ in order to remain competitive and reduce operating costs. This is a difficult thing to do,
especially when the dairy industry is such a competitive industry to participate in.
Possibly the most relevant farmers’ representative organization in the dairy industry is the National
Farmers’ Federation. The National Farmers’ Federation (NFF), according to their web site, is ‘the
peak national body representing farmers and, more broadly, agriculture across Australia. The NFF is
farming’s modern role, contribution and value to the entire community’. The web site also states
that the mission of the NFF is ‘to influence the Australian Government, Parliament and the broader
community through national and international representation and advocacy, to achieve a strong,
Therefore the National Farmers’ Federation are responsible for aiding a collective number of farmers
in negotiating crucial aspects of difficulty within the primary sector. These aspects mainly include
industrial relations problems and disputes and problems regarding commodities markets, which is
where the dairy production industry comes into the equation. The NFF negotiates with Government
bodies and discusses pressing issues within the industry. Therefore, there would have been much
discussion regarding the deregulation of the dairy industry as the NFF’s main concern would have
been the impact of deregulation on farmers and also the impact deregulation had on Australia’s
competitive position within the international dairy industry. The NFF, is still operating in order to
continually achieve positive outcomes for both farmers and the entire agriculture market sector.
Compare the Howard Government’s WorkChoices legislation for Australia’s industrial relations
with the Fair Work Australia legislation of the Rudd Government. In your answer show that you
In 2006, The Howard Liberal Government introduced the ‘WorkChoices’ legislation, which was a
reform of the ‘Workplace Relations Act 1996’. This ‘WorkChoices’ legislation aimed at regulating
industrial relations within Australia, and at the same time, aimed at minimising unemployment and
increasing efficiency and productivity in the workplace through reform concerning the setting of a
new minimum wage and working conditions, reducing the scope of unfair dismissal laws, and most
notably, through the introduction of individual contracts, also known as Australian Workplace
Agreements (AWAs).
The ‘WorkChoices’ legislation introduced radical reform and served as political ammunition for the
Rudd Labor Government in the 2007 election campaign. The main areas of reform were centred
around reducing the effectiveness and power of trade unions and industrial tribunals such as the
AIRC, introduction of the Australian Fair Pay Commission (AFPC), which was an independent tribunal
which had the main objective of the setting of minimum wages and conditions for workers, the
outlawing of the use of pattern bargaining, which by definition is the use of trade unions in
negotiations who negotiate with agencies and bodies for an improvement in working conditions
based on precedent. It also outlawed industry-wide industrial action, such as strikes. Most notably
was the exemptions of some firms from unfair dismissal laws and the introduction of individual
workers contracts (AWAs), which brought to the fore, the requirement of enterprise bargaining
between employers and employees regarding working conditions and wages. This was seen as a
drastic and detrimental aspect of industrial relations legislation as it was made apparent that if
employees refused to sign individual contracts regarding their working conditions then it was quite
simple for employers to terminate employment within a firm. It was also detrimental in the sense
that employees with relatively no negotiation skills were therefore disadvantaged in negotiating
their working conditions and wages. This legislation demonstrably made it quite easy for employers
to construct, alter and/or terminate an employment contract. This therefore made a large majority
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of the Australian workforce fearful and insecure in their work as there was always a possibility of
retrenchment.
When the Rudd Labor Government was elected into office in 2007, many of the aspects of the
WorkChoices legislation were abolished, including the AWAs, in an attempt to make Australian
industrial relations more equitable for more Australian workers. The Rudd Governments
introduction of the ‘Fair Work Australia’ legislation was implemented to do just that. The most
notable reform in industrial relations from WorkChoices to the Fair Work Australia legislation was
the introduction of Fair Work Australia, which is a tribunal which was put in place to replace the
Australian Fair Pay Commission and the Australian Industrial Relations Commission (AIRC). Fair Work
Australia has the role of carrying out functions such as setting minimum wages and employment
industrial action complaints and processes in dealing with industrial action and, enterprise
bargaining functions.
Fair Work Australia is also regulating industrial relations within Australia, but attempting to do so on
a much larger and more national scale, and also attempting to create equality for both employer and
employee, as the common view of the WorkChoices legislation was that it was developed to benefit
The main difference between the WorkChoices legislation and the Fair Work Australia legislation is
that WorkChoices implemented the Australian Fair Pay Commission, which as stated previously, is a
third party, independent body that was put in place to handle the setting of work conditions and also
the setting of wages, whereas the Fair Work Australia legislation implemented the Fair Work
Australia tribunal to deal with not only the handling of work conditions and setting of wages, as well
Another major difference was that WorkChoices implemented individual work contracts which were
constructed by employers, stipulating the working conditions that the employee would be subjected
to, whereas, the Fair Work Australia legislation abolished individual agreements and put in place a
national standard for workers, which made working conditions a bit more just for all workers, but
also removed exemptions of some firms for unfair dismissal laws, which also ensured job security for
workers.
Discuss the usefulness of the concept of ‘path dependency’ for explaining Australia’s history of
institutional continuity and change. In your answer discuss three examples of how the concept
could be useful.
Path dependency is a useful notion for explaining Australia’s history of institutional continuity and
change, as it stipulates how tradition of concepts and ideas is hard to break away from, and it also
highlights, in the event of major reform in an aspect of institution, how crucial a role institution plays
in the shaping of events leading up to reform. Path dependency is strong in Australia as the
Australian economy’s history is one of stable ongoing institutional development and has not been
invasions. This has therefore allowed Australia to continually build of old institutions, and for that
reason, many of the traditions in place within Australia are so powerful and at times can be seen as
being quite rigid. ‘Economic behaviour and policy are heavily influenced by the historically- derived
The best way to understand path dependency is to recognise that all of the current rules, regulation,
laws and institutions put in place within Australia are all products of history- meaning that they all
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developed from institutions of the past. It should also be noted that the implementation of
institutions and policies result in the formation of organization of regulation and/or authority that
continue for extensive periods of time. Therefore, it indicates that the older the institutions, the
Path dependency could be useful when reforming institutions that appear to be ineffective, as the
history of the institution can be traced and is therefore evident, but can then be assessed in the
current environment and a decision can be made as to whether the institution is working as
effectively as expected. Studying the Economic History of Australia would therefore indicate how
changes in the economy have affected people and institutions and how the policies put in place
affect economies. For example, the Australian industrial relations system was reformed after the
WorkChoices reform, as it became apparent that, although a similar policy had been put in place
within Australia demonstrated a general consensus that the Australian community would not benefit
from this reform. Therefore, path dependency would serve as an indicator that radical reform is
Path dependency could also be useful with microeconomic reform. Like reform regarding industrial
relations policy, path dependency can establish grounds for further and future developments
regarding economic competitiveness. An example is the reform regarding the agriculture sector. As
the agriculture sector has, for a time, been under pressure from the many competitive forces of
international markets, reform was required to ensure that the agriculture sector continued to strive
as it is a crucial element of the export market for Australia. One main reform that took place was the
subsidising of some elements of the agriculture sector to ensure that agriculture in Australia is still a
strong viable force. Another way in which reform took place in the agriculture sector is through
deregulation. Deregulation ensured that competitiveness was the most crucial aspect in succeeding
in a global marketplace.
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Perhaps a very notable institution within the Australian history is that of the Constitution. Since the
federation of Australia in 1901, the constitution has remained unchanged and therefore one of the
oldest institutions in place in Australia. Path dependency would be a useful concept with regards to
the prospect of potentially changing the constitution as the history surrounding the Constitution
indicates, that although in itself, the Constitution is old and quite rigid and certainly very powerful,
path dependency would also indicate that reform regarding the Constitution would not be required
Reference List
http://www.nff.org.au/strategic-plan.html,
http://www.nff.org.au/aboutus.html