How has the labour market 'deregulation' contributed to Australia's productivity growth?

Essay by paulkeaneCollege, UndergraduateB, October 2004

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How has the labour market 'deregulation' contributed to Australia's productivity growth?

Labour Market Deregulation Definition

Labour market regulation refers to the imposition of rules, whether informal or formal, impacting and controlling and restricting the behaviour in which labour can both operate and be dealt with. Sources of regulation and control come from not only the Government, Industrial Commissions other government institutions but lobbyist groups such as workers unions and commerce associations. Labour market de-regulation is the opposite of such regulation, whereby there is an attempt to decrease restrictions on the laws and regulations by which labour operate. (Brigs, 2004 )

Productivity growth

Productivity growth refers to the relationship between increases in production and services (output) in relation to a constant level of input such as labour, capital and land. (ABS, 2004). Considered more broadly, productivity measure the ability of a nation to harness its physical and human resources to produce output efficiently (Productivity Commission, 2003 )

Main Body

For the past two decades, it is clear that successive governments have looked towards labour reform for growths in productivity.

It must be clear though that labour reform has not always been the mantra of the day. The commencement of Labour Market regulation began in 1907 when the President of the Commonwealth Court of Conciliation and Arbitration (Now the AIRC), Justice Higgins', made a decision on the fixed wages of workers. The "Harvester judgement' established the first precedent for wage fixing in Australia. Since that decision, regulation in the economy has begun to become greater and more complex in nature. Since the 1980's however, there has been a greater emphasis on de-centralised bargaining as Governments have looked for greater labour productivity. It was recognised that in order to increase productivity, changes had to be made in labour regulation and legislation and later...