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.

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.

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.

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.

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.

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 examines the structure of Australian multi-employer awards. It suggests that these awards do not exhibit occupational, industry or representational concentration and thus follow no clear rational principles. The hybrid award system is sub-optimal and can be explained by employer associations’ neglect in the formative period of arbitration. Multi-employer awards are in need of reform if Australia is to become and remain internationally competitive.

The need to improve workplace performance and productivity is a commonly expressed view. This paper reports on community perception of productivity. It suggests that workers’ negative perceptions regarding a distribution of the benefits of productivity may act as a barrier to productivity enhancement.