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Economics

Home > Economics > Economic policies and management > Labour Market Policies

Exercise 1

1. What is a prices and incomes policy?
   
   A prices and incomes policy includes all actions by the government to influence prices, the working conditions and the incomes of Australians. Prices and incomes policies attempt to control wages growth as a source of cost inflation and achieve a fairer distribution between wages and profit.
   
   
2. List the main weapons of a prices and incomes policy.
   
   The main weapons or tools that a government can use include:
   • a wage/price freeze, where no increases in either are allowed over a set period of time
   • the use of the ACCC to monitor price increases competition
   • wage indexation
   • a wage-tax trade off
   • enterprise bargaining.
     
     
3. Briefly outline the purpose of the Accords used by the Labor governments of Hawke and Keating.
   
   The Accords were a social contract of the Hawke and Keating Labor governments between 1983 and 1995. They were based on consensus and cooperation between the Federal Government and the Australian Council of Trade Unions (ACTU). The Accords had the basic elements of a centralised wage system with minimum wages and specified working conditions for a number of occupations. The Accords attempted to reduce the level of inflation, industrial disputation and unemployment.

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