This paper examines some of the main arguments relating to the effect of privatisation on efficiency. It is concerned with both narrow economic issues and wider political issues. After a critical examination of some theories, which assert that private ownership is intrinsically more efficient than public ownership, it is argued that for large scale enterprise there are no strong economic reasons for believing in the superiority of private enterprise. As long as the government in question has the will and the power to make a public enterprise function in a socially efficient fashion, the public enterprise may be just as efficient as private enterprise whilst offering additional economic and social advantages.

This paper describes and analyses aspects of Australian income support and service arrangements for the aged in the context of broader issues relating to privatisation. It is argued that much of the welfare privatisation debate is overly simplistic and does not recognise the important role which the non-government sector already plays in aspects of support for the age. Analysis of income data shows, for example, that transfer income currently accounts for less than half of the income of the aged. The trend towards superannuation is apparent in the data, although some doubts are raised about the impact of superannuation expansion on the finance of population ageing. In the area of community services, the paper describes the development of policy over the last few decades in order to illustrate the complexity of existing arrangements. The switch from institutional to community care is identified as a major trend, particularly during the 1980s, and some of the implications of this development for privatisation are drawn out and analysed.

This article examines the economic, as opposed to social, effects of the Fightback package and concludes that both beneficial and adverse effects of the tax measures have been exaggerated. The switch from various taxes to a GST will increase efficiency but only slightly and will have a neglible effect on labour supply and savings. Adverse effects on small business and on federal financial relationships will not have a large impact on the economy. The superannuation proposals will probably reduce savings. The most important effect of the package may be to increase unemployment as a result of the emphasis on enterprise bargaining combined with a determination to prevent any rise in the rate of inflation following the introduction of a GST.

It is argued that New Zealand’s privatisation programme is unlikely to meet its main overt objective of easing fiscal problems. In the case of sales of major public utilities, neither allocative, internal nor social efficiency are likely to be enhanced either. A brief history, and calendar, of the asset sales programme is provided.

The revenue, efficiency, distributional and simplicity effects of using a GST to replace some existing indirect taxes and to reduce income taxation are assessed. Replacing the wholesale sales tax (WST), the general revenue raising portion of petroleum excise and payroll tax with a goods and services tax (GST) promises efficiency gains and negligible net redistribution. The principal case for using a GST to fund reductions in Australia’s hybrid income tax system is to increase the productivity of saving and investment.

This paper considers the evidence from simulations with major econometric models of the UK and EC relating to the effects on the main macroeconomic variables of a switch towards indirect taxation. The conclusion from this evidence is that a switch from income tax towards indirect taxation tends to increase the price level, the rate of inflation, the current account deficit, and the public sector borrowing requirement, and to reduce the country’s net wealth, at any given level of real GDP. One especially important conclusion is that the increase in inflation is significantly due to the cut in income tax, and not only to the effects of the rise in indirect taxation; and that the effects on inflation of the cut in income tax tend to last longer than those of the rise in indirect taxation. If the government of the country making the switch in taxation tries to hold down the consequently higher inflation and the rise in the current account deficit by reducing economic growth, the adverse economic effects will be correspondingly greater — and this appears to be what happened in both Britain and New Zealand, the two OECD countries that have made a marked shift in tax structure in this direction over the past decade.

The privatisation of the ten large water authorities in England and Wales is assessed in terms of some of its costs and benefits. Particular attention is paid to claims that privatisation would lead to less regulation, more competition and improved water services for consumers. The conclusions are that privatisation of water services was costly to taxpayers, led to more economic regulation and inadequate environmental regulation and did not significantly increase competition in the provision of water services.

This article uses data on the interactions of income taxation and state welfare transfers on effective marginal tax rates (EMTRs) in Australia to argue policy reforms for removing poverty traps created by high EMTRs. This highlights the need for state welfare and income taxation reforms to target those elements of income taxation and social welfare interaction that are most significant for high EMTRs and for high EMTRs extending across wide incomes ranges. Proposed welfare changes involve simultaneous reductions in base-level state welfare transfer payments, along with eligibility for supplementary transfer payments for able persons that are proportional to market labour activity. Proposed taxation changes include removal of distinctions between taxable and tax-exempt state welfare transfers and a gradually-progressive revised taxation scale.

This paper examines the distributional analysis of the impact of the Fightback! package on Australian households. The paper examines the veracity of both the results presented and the analysis undertaken by the Opposition. The critique by the Treasury is investigated, as are omissions by both Treasury and the Opposition. Some attempt to measure the direction and significance of these excluded impacts is also analysed.

Proponents of voluntary exchange in labour markets place great reliance on the contract of employment as an appropriate vehicle for the practical implementation of their exchange model. This paper argues a contrary view and suggests that the contract of employment may not be an appropriate vehicle for the voluntary exchange of labour.

It is recognised that for efficiency and equity reasons that governments need to implement active labour market programs (LMP). Such programs can help to improve the matching of labour supply and demand, reduce wage inflation pressures generated where labour markets are subject to supply shortages and bottlenecks, assist disadvantaged labour market participants obtain employment, help reduce poverty and income inequalities generated by the persistence of long-term unemployment, and they can raise overall productivity levels and living standards. What is at issue is not the need for LMP, but the type and mix of LMP required in Australia.

The government has embarked upon a substantially supply side orientated LMP aimed at improving the employment prospects of the unemployed. On the demand side this has been augmented by a private sector wage subsidy program (JOBSTART). Such a mix of LMP is inappropriate for addressing the labour market problems associated with a recession. The government should, as a matter of urgency, consider the immediate introduction of a public sector job creation scheme (PSJCS). The advantages of such a program include its potential to directly address the problem of long-term unemployment (LTU), assist disadvantaged communities and provide an effective work experience support for the plethora of supply side LMP. Such a program could be effectively delivered by utilising the existing administrative structures of the CES and local government.

This paper examines the significance of information about “going rates” in the resolution of issues by negotiation. In addition to the strategic factors which negotiators must consider this paper identifies a behavioural factor, the mutually prominent alternative, which also has the effect of drawing negotiators towards the going rate as a settlement for their own negotiations. The results of research based on an experimental negotiation confirm the importance of going rate information on negotiation outcomes. This finding, and its explanation in terms of the going rate adopting the characteristics of a mutually prominent alternative, has significance in the context of enterprise bargaining; it would suggest that outcomes negotiated at the enterprise level may not be as egocentric as some advocates of a deregulated labour market might suggest.

In an earlier issue of this Journal the Shadow Minister for Industrial Relations outlined the Coalition’s industrial relations policy. A major ingredient of that policy is the provision of voluntary industrial agreements. This article reviews the constitutional heads of power under which any future Coalition government may seek to legislate for voluntary industrial agreements. It suggests that they could be major impediments to such legislation.

This article examines the Australian Pulp and Paper Mills Ltd. (APPM) dispute which took place in Burnie, Tasmania between March 3 and June 10, 1992. The dispute is placed within the context of major changes in Australian industrial relations, which have been in process since 1986. Management and unions throughout Australia are still experimenting with a variety of industrial weapons to achieve their aims and goals within the parameters of the “Structural Efficiency Principle” and “enterprise bargaining”, constructed in Accords III through VI, from 1986 to the present.

It is argued that the crucial change during the past six years has been the ability of companies to re-establish managerial prerogative through litigation. This has provided management with the power to confront secondary issues and agents of change such as the Accord, the Australian Industrial Relations Commission, Structural Efficiency, Enterprise Bargaining and Restructuring with a new vigour, toughness and effectuality. Increasingly docile, debilitated and legally disabled union officials and workers seem to be coming to the view that a union victory occurs if the company agrees to abide by the law while directing its workforce, and recognises the workers’ right to be represented by a “third party”.

Proponents of voluntary exchange in labour markets place great reliance on the contract of employment as an appropriate vehicle for the practical implementation of their exchange model. This paper argues a contrary view and suggests that the contract of employment may not be an appropriate vehicle for the voluntary exchange of labour.

This paper attempts to test the recent British Industrial Relations model of trade union membership by an examination of a survey of early school-leavers in Dunedin, New Zealand which was carried out in October 1989. The findings offer strong support for the model because the same distinct strands of core motivation and remainder attitudes were evident. This demonstrates that the model could be successfully applied in a different institutional, cultural and economic context. The major cross-national differences to emerge were that most Dunedin youngsters intended to join a union; for them, collective instrumental reasons were very important and values of little significance. Furthermore, there was little evidence of disinterest or ignorance amongst the minority which was negative towards trade union membership.

A recent article on trade union membership (Cregan and Johnston, 1990) suggested that conventional neoclassical theories are flawed by the free rider paradox, whereby a rational individual will not bear the costs of joining a union to gain rewards that are available to all the workforce as public goods. It proposed that the dilemma could only be solved by a membership theory which takes into account several different sources of individual motivation drawn from several disciplines. These were identified in a longitudinal survey of London early school-leavers, 1979–1981, in reasons given by young people for their membership decision, positive or negative, from which employees could be categorised in social movement parlance as core and remainder. However, the authors proposed that further direct investigations should be made in different contexts. For example, it may be that some responses were culturally or institutionally specific, or were based on economic context. Accordingly, a similar survey of a single cohort of early school-leavers was carried out ten years later in Dunedin, New Zealand. The aim of this paper, therefore, is to test the validity of the framework of the model within a different national context.

The article will be organised in the following way. First, a brief summary of the Industrial Relations model of trade union membership will be presented and two hypotheses will be drawn from it. Second, the latter will be tested by a discussion of the results of the Dunedin survey and a comparison with those of the London survey. Third, implications of the findings for the consequences of the 1991 Employment Contracts Act will be briefly examined.

The fundamental objective of the Government’s industrial relations policy is to encourage and assist Australian companies and their employees to adopt work and management practices that will strengthen their capacity to compete successfully both in domestic and international markets. To this end we support co-operative and equitable workplace bargaining, with wage increases being linked to the reform of work practices and attitudes. Our support for decentralised bargaining is aimed at improving productivity by fostering a new workplace culture of striving for continuous improvement. We emphatically reject the view that such an outcome will be achieved by wholesale deregulation and reliance on unfettered market forces. The Government is committed, for both equity and efficiency reasons, to maintaining the Accord approach to wages policy. We are also committed to an independent Australian Industrial Relations Commission playing the vital role of protecting lower paid employees through the safety net of minimum award wages and conditions.

This paper reviews the empirical evidence of rigidity in the New Zealand labour market over the period 1984–1990, with particular reference to collective bargaining. It demonstrates that labour market institutions displayed an important degree of flexibility over this period. Despite this, labour markets were stigmatized as ‘inflexible’ in public debate and labour market policy has been driven by the assumption that more flexibility was required.

This paper uses AWIRS data to examine two related questions. First, how extensive are closed shop arrangements in Australia and second, what factors are associated with closed shop coverage? The paper draws heavily on earlier work by Gianni Zappala, but argues that Zappala’s estimates substantially overstated the extent of the closed shop. Moreover, unlike other studies of the closed shop (both in Australia and overseas), this paper utilises multivariate techniques to isolate the impact of the different factors thought to be associated with closed shop coverage.