Transitional labour markets : a social investment and risk mitigation strategy for social policy

Drawing on transitional labor market (TLM) theory, this introductory chapter highlights major themes, overviews the contributions to this volume and suggests a future agenda for policy makers. The focus of applied research projects has been the impact of post-modem social transformations on systems of social protection, looking through the lens of the labor market and shifts in household and family structure. The Transitional Labor Market project uses the TLM model as a means of developing new thinking on how flexibility and innovation might be paired with social investment and new forms of social protection. TLM theory emphasizes the importance of institutions and of the links between different institutions which frequently operate as policy silos, rather than integrated systems to buffer risks and support capability and enhance employability. The great advantage of the TLM model is that it draws attention to the right places for strategic reform. It does not offer a standard set of institutions to facilitate transitions however.

Issues in Australian foreign policy : July to December 2010

Two unforseen developments impeded the Labor government’s capacity to pursue its foreign policy objectives in the period under review. Firstly, Labor’s precarious standing in the parliament tilted the government’s policy agenda in favour of issues that the Greens prioritised. Gillard addressed some of these issues, for instance by holding the parliamentary debate on Afghanistan and by pursuing Japan over whaling in the Southern Ocean, but not to the degree that the Greens demanded. Immigration was emblematic of the government’s travails. The Greens advocated an increase in the refugee intake, but the Coalition favoured the resumption of offshore processing. Just when Labor’s proposed Timorese solution was becoming a realistic possibility, the High Court’s decision devalued the entire notion of offshore processing. The only consolation for the government was that the court had reduced the options available to all political parties.

Secondly, the Wikileaks saga revealed that Rudd may no longer be — and perhaps never was — Labor’s trump card in the realm of foreign policy. American assessments of the foreign minister’s character and judgment were in parts scathing. The Obama administration, nonetheless, appeared to readily and usefully absorb his analysis of Chinese politics. Quite how revelations of Rudd’s conversations with Clinton will affect his relations with the leaders of the Chinese Communist Party is another matter. It may well be that Rudd’s influence on Chinese leaders was always wildly overestimated, but in any case it seemed likely that the foreign minister would spend some time rebuilding ties with Beijing in 2011.

A third development — which hitherto had applied more in the realm of perception than reality — similarly threatened to limit the options open to future Australian governments of all stripes: the intensifying debate over alliance management that Hugh White’s essay instigated. Judgments about what sort of region — and what sort of China — Australia will face were imprinted in issues such as the rare earths find and the AUSMIN meeting. By the end of 2010, few issues could be discussed without reference to the China factor.

Opportunity lost? Victorian Labor's enactment of community development 1999-2006

The idea of community development has been evoked by Australian governments over many decades. The expressions of community have differed widely, often as a result of politics rather than informed policy. In 1999, after seven years of radical neo-liberal restructuring in Victoria, the Bracks government found itself unexpectedly elected to power. They faced new challenges such as a diminished public sector, growing social inequality and climate change. The first two terms of Victorian Labor were a seminal period in terms of the role they would invoke for ‘community’. Did grass roots participation take a central place, or did rhetoric rule over substance? The evidence points to a government maintaining a neo-liberal trajectory, and thereby losing an opportunity to enable an active citizenry.

Putting the Australian Labor Party in international perspective

This paper assesses the Australian Labor Party's current debates over future directions with reference to attempts by the left of centre political parties in other western nations, especially in Western Europe, to deal with the end of the economic "golden age" since the early 1970s and the widespread resurgence of neo-liberal ideologies since the late 1970s. The dominant recent view of such comparisons has been through the ideological lens of the "Third Way". This vision however tends not to see relevant variations between the experiences of social democratic parties in individual Western European nations as they have sought to deal with adverse circumstances since the early 1970s. Nor does the Third Way view sufficiently extend to the widely varying background landscapes: that is, the different levels of historical achievement by left of centre parties in the different nations. Some social democratic parties in European countries are pursuing more progressive political agendas than the British Labour Party under Tony Blair and they are starting from a very different basis of policy achievement and political strength than either the British or Australian labour parties. The nature and extent of these international differences need now to be highlighted from an Australian political perspective in order to better inform the current debate about the range of options for the ALP and the current comparative condition of the Australian party system. As part of this analysis, the relationship between the erosion of the traditional blue-collar support bases of the major left of centre parties in various nations, amid economic restructuring and challenges to traditional immigration patterns, and the rise of support for anti-immigrant policies and parties, need to be carefully examined and evaluated.

Victorian Labor and the environment : a legacy to be proud of?

From October 1999 through to November 2010, Victoria was governed by Australian Labor Party (ALP) led governments. The ALP‟s defeat at the November 2010 election provides the opportunity to take stock of their policy achievements in the environmental domain, with a particular focus on how the concept of sustainability was considered in the strategic directions pursued and policy and institutional reforms introduced. In assessing their performance, the context within which the ALP governed is considered, an account of the policy trajectory of their three terms in government provided, and the adequacy of this trajectory assessed. While the analysis is focused on Victoria, the lessons drawn may have wider relevance.

Another opportunity lost? Victorian Labor's enactment of sustainability, 1999-2010

‘Sustainability’ provides the dominant frame for environmental policy debate, even though there is considerable debate to as to what sustainability is, why is it needed, and how can it be progressed. From 1999 through to 2010, Victoria was governed by Australian Labor Party (ALP) led governments that, at times, actively pursued the goal of sustainable development. This culminated in the stated ambition for Victoria to be ‘world leaders in environmental sustainability debate and practice’. This paper explores the way in which sustainability was enacted by Victorian Labor while in government. The evidence indicates that the potential of Victorian Labor's vision was never realized, and that it failed to significantly reform the neoliberal policy settings it inherited.

Output and labor productivity in organized manufacturing: a panel cointegration analysis for India

One of the policy puzzles faced in India during the last two and half decades has been the weak association between output and labor markets, particularly in the manufacturing sector. In this research, we investigate the long-run relationship between output, labor productivity and real wages in the case of organized manufacturing. We adjust the measure of labor productivity incorporating bottlenecks, such as lack of infrastructure, access to external finance, and labor regulations, which all may influence labor market outcomes. Using panel data from seventeen manufacturing industries, we establish long-run dynamics for the output-labor productivity-real wages series over a period of nearly three decades. We employ recently developed panel unit root and cointegration tests for cross-sectional dependence to incorporate heterogeneity across industries. Long-run elasticities are generally found to be low for labor productivity compared to real wages due to the changes in manufacturing output. There are variations across industries within the manufacturing sector for the effects of the labor market on manufacturing output. In some industries, lower wages are associated with higher output, and the reason for the positive relationship in other industries could be due to workers' bargaining power.

Terms of trade shocks and monetary policy in India

Central banks in emerging market economies often grapple with understanding the monetary policy response to an inter-sectoral terms of trade shock. To address this, we develop a three sector closed economy NK-DSGE model calibrated to India. Our framework can be generalized to other emerging markets and developing economies. The model is characterized by a manufacturing sector and an agricultural sector. The agricultural sector is disaggregated into a grain and vegetable sector. The government procures grain from the grain market and stores it. We show that the procurement of grain leads to higher inflation, a change in the sectoral terms of trade, and a positive output gap because of a change in the sectoral allocation of labor. We compare the transmission of a single period positive procurement shock with a single period negative productivity shock and discuss the implications of such shocks for monetary policy setting. Our paper contributes to a growing literature on monetary policy in India and other emerging market economies.