The Third Way program for work, industrial relations and employment is examined. The discussion considers the publications of major third way proponents in the UK and Australia. It then considers what policies have been instituted under New Labour in the UK. The discussion then moves to the possibilities for Australia. Overall the Third Way program is either underdeveloped in some areas (eg the workplace) or largely following orthodox supply side policies in other areas (eg unemployment). The article concludes with a list of some of the important work and workplace issues that could be addressed by a new policy program.

The article explains why a ‘Third Way’ for economic management has become important in New Zealand. Economic growth fell sharply compared to Australia after 1984, due to a slow-down in New Zealand’s labour productivity growth after 1991. The paper argues this was partially the result of a neglected aspect of economic management during the 1984–94 decade of economic reform: fostering domestic physical capital formation. The third way differs from both the approach adopted prior to 1984 and the approach adopted during New Zealand’s reforms, based on government involvement, but not direct intervention, in industry and regional development.

We use data from the ABS National Health Surveys for 1989 and 1995 to assess if adverse selection is present as an influence on the proportions the ‘insurable population’ with health insurance (the ‘incidence of coverage’); and of those covered, the ‘risk composition’ of health fund membership. Further, we assess if any changes in these characteristics between the two surveys are consistent with a continuing process of adverse selection. The characteristics of the respective sample populations used in our evaluation include age and income distributions, health characteristics of various types, and behaviour that is known to incur health risks. Our findings suggest the presence of adverse selection in both 1989 and 1995, and in terms of the age distribution of membership and especially the number of health conditions suffered, changes composition of the health fund membership between the two surveys indicate the process of adverse selection accelerated over the period.

Over a three year period from July 1997 to July 2000, the Australian government introduced a series of policies designed to increase the proportion of the population with private health insurance. The combined effect of the policies was an increase in the population coverage from a low point of 30.1 percent to 45.7 percent. The motivation for these policies was to force more Australians to use the private sector for their hospital care and in so doing reduce the pressure on the public sector. We piece together fragmentary early data from various sources and various time periods. We find that the increase in activity in the private hospital sector and the reduction in public hospital waiting times has indeed occurred.

At various times in Australia’s recent history, the Commonwealth government has used the tax system to support its public health policy goals. Tax concessions to particular industries or groups of taxpayers cost the government the same as direct subsidies. However, the income distribution of these tax ‘carrots’ and ‘sticks’ has not previously been analysed. This study breaks new ground by examining how the benefits of tax concessions for health expenditures were distributed among taxpayer income groups in the four decades since 1960, and how this affects the progressivity of Australia’s system of funding health care. It is found that around half of the $2 billion tax subsidy for private health insurance accrues to the taxpayer group with the highest third of incomes.

This paper investigates the extent to which unemployment, particularly among older males, is hidden by the welfare system. It is argued that the official unemployment rate has fallen because of a decline in participation rates among older males since 1972, and a significant proportion of these can be accounted for by the increase in the percentage of males receiving the Disability Support Pension and the Mature Age Allowance. These males are considered the Labor Market Disabled, since the principal cause of them being on welfare is the weakness of the labor market in which they have traditionally found employment. The unemployment rate is then reconsidered after including the LMD into the calculation, producing a more pronounced hysteresis affect over successive business cycles. It is argued that active job creation programs are required to move these people from welfare to work.

This paper addresses two questions with regard to Australia’s unemployment policies over the last decade: namely, the extent to which labour market reform has led to increased labour market flexibility; and the extent to which increased output per worker has meant that strong GDP growth has been translated into correspondingly large reductions in unemployment. With regard to the first question, we use shifts in the Beveridge Curve as a measure of changes in flexibility (following Solow). Shifts in the Beveridge Curve suggest that changes in the efficiency of labour market matching reflect the cyclical effects of hysteresis rather than the effects of labour market reform. With regard to the second question, we decompose changes in the output-employment ratio into structural effects, average hours effects, and residual factor intensity effects. We identify those sectors of the economy in which output per worker has increased significantly.

This paper investigates two related matters. First, what proportion of the population is represented by the matched sample (i.e. by the gross flows data) in the Labour Force Survey, why is this proportion what it is and why does it vary over time? Second, given that around 20% of the population are not represented in the matched sample, how representative are labour market indices derived from the matched sample data and, if biases are present, what is the source and what are the implications of the bias?