Unemployment And How Australia Tackles The Issue Economics Essay


Unemployment is the most significant and the most disturbing crisis facing the world as whole recently, it is a tragic waste of human and economic resource. Once people are unemployed, they, their families, and the entire country lose. Workers and their families lose income, and the country loses the goods or services that could have been produced, also government face popular dissatisfaction creates stimulus for anti-government activities, as well the purchasing power of these workers is lost, which can direct to unemployment for yet other workers and significantly drop the level of economic growth and economic development. People think that their government makes policies, so public known government responsible for poor policies and economic situations which lead to unemployment, as a result parties must considering the employment as one of major issues to face (Case, 2006; Gordon, 2004; Pritchett, 1997).

The influence of Australian parties on the economy and employment policies has grown steadily in this century, particularly since 1940 with the general acceptance of the Keynesian thesis that positive government action is essential to ensure a high level of output and employment. On May 30, 1945, The Australian Labor Party Prime Minister John Curtin and his Employment Minister John Dedman presented a white paper in the parliament called 'Full Employment In Australia', the first time any government apart from totalitarian regimes had clearly committed itself to providing work for any person who was willing and able to work. Conditions of full employment lasted in Australia from 1941 to 1975(Gordon, 2004).

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With the upward of neoliberal policies in the 1980s, Australian politicians have identified unemployment as one of the important economic disease. From the late 1980s on, many developed countries started to make economic policies and increase their influence on regulating markets, some implementing the right policies and some wrong policies. Some countries succeeded in exterminate unemployment easily. However, for a few others it has taken decades to achieve low rate of unemployment (Gordon, 2004; Dollar& Kraay, 2002 a&b; Meadows&Randers, 1973).

In case of Australia all three major parties formulate and adopted their special employment policies since that time and upgrade them, base on future challenges regularly. Britain's Westminster structure was the most significant factor in the progress of Australia's system of government and policy making. According to this model the origins of Employment policy are apparent; Political parties, with some assist from pressure groups, formulate alternative platforms of Employment policies and followed by present them to the electors who choose between them. The victorious party then structures a government and proceeds to put its promised policies into effect, again with more or less help and motivation from pressure groups (Hawker, Smith & Weller, 1979; Richards &Smith, 2002).

The Westminster form makes several standard hypotheses about how Employment policy made. First, policy is formulated by political parties, while the bureaucracy is the disinterested instrument of implementation: there is meant to be separation into two parts between politicians who make policy and public servants who implement it. Second, Employment policy is made on a sequential basis. Demands come forward from the society or the electorate and are intelligible through pressure groups or the media; they are then bring together by parties and decoded into policies; the elected politicians choice between proposals; parliament authorizes and legitimizes them and then the public service implements them. Third, the process is regarded as a rational one, at least as far as the choice of ends and means. The legislation incorporating cabinet decisions represents the ends; the allocation of resources and the choice of methods are the means; and both are influenced by parliamentary debates (Althaus, Bridgman & Davis, 2007; Hughes, 1998).

In reality the whole process is far more complicated and muddled, Politicians are often undecided about what Employment policy they want, and they may be more interested in power and office than policy. Public servants are often not pliable or neutral. They are often involved in initiating policy, aggregating demands, and settling means, while politicians are concerned with the details of administration, Pressure groups often bypass parties and parliament altogether and deal directly with the administration in formulating policy or in reformulating it when it is implemented (Richards &Smith, 2002).

The ability of political parties to be effective in the Employment policy-making and implementation processes depends on two factors. First, they must formulate their own views of what the policies of a government should be; second, they must be able to ensure that their views about desirable policy are accepted as authoritative and final and are later implemented. To do the latter, they must be able to win office and control the machinery of government; there is little that a party in opposition can do to influence policy through parliament. At most it can use public opinion; if it has the capacity; it can introduce new issues or make old ones more salient. In both stages, people must gain access to the processes - whether in the party machinery or in office itself- and must have appropriate resources. The means available to the party in the pursuit of its policies can be classified into two categories-fiscal and monetary policy (Althaus, Bridgman & Davis, 2007; Hawker, Smith & Weller 1979).

Australian economy and unemployment

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A sustained expansion policy in the economy lasting now 17 years, has reduced current unemployment to unusually low levels down and running 17 uninterrupted years of economic growth seeing as 1992 - approximating 3.3 a year. Australia's per-capita GDP is delicately upper than that of the UK, France and Germany in conditions of purchasing power parity. Australia was ranked fourth in the United Nations 2008 Human Development Index and 6th in The economist global quality-of-life index 2005, The 2007 OECD economic review cite that living standards in Australia go beyond those of all group of 8 countries (Factbook 2009).

The Australian economy has experienced large changes in the structure of what it produces and how, these have been caused by technological change, housing market boom, by fuller integration into world markets, growing trade with China, beside with the rise of competition from lower wage countries in the creation of manufactured goods and progressively more, services; places Australia in the top level of developed states in conditions of persistent rates of growth (IMF 2007; CIA Factbook 1990-2010).

In the case of Australia, unemployment has been an irritating, and sometimes intense, problem for the past 30 years. But, over the last decade unemployment has significantly decreased to approximately 5%. From an overall perspective recent problems are; youth unemployment, long-term unemployment, Underemployment and poor employment opportunities for older workers and shortage of labor, especially of skilled labor (Althaus, Bridgman & Davis, 2007).

Some problems of unemployment in Australia

Annually, governments spend billions of dollars for adjusting macroeconomic policies to gain better employment rate, Macroeconomic policy is an important activity to Australian parties, parties won or lost the election as a result of economic conditions. According to this, politicians attempt to create the most preferable economic conditions immediately before elections, even though their policies may require costly adaptation after the election (political business cycle' theory). Poor policies and weak economic situation have effect on election, (Olson (1965; 1982) has indicated that in developed democracies chances of reelection pended on the growth rate and the unemployment rate immediately before the elections. But the most important effect is on economic growth; Unemployment is very strictly associated to the level of economic growth. If the economy is growing fine, then there will be jobs formed to suit this demand. However, if growth pause and company, commercial business or corporations need to decrease production, then they will set people off (Case, 2006; Gordon, 2004; Pritchett, 1997).

The costs of unemployment are doubtful, however 3 are highlights more: 1- Individual 2-Social 3-Socio-political, include; stoppage to pay mortgage or to pay rental fee possibly will direct to homelessness through foreclosure, malnutrition, disease, mental stress, and failure of self-esteem, piloting to depression. Ashley (2007) established that for every 10% raise in the amount of unemployed there is a raise of 1.2% in overall death, a 1.7% adds to in cardiovascular disease, 1.3% extra cirrhosis cases, 1.7% additional suicides, 4.0% further arrests, and 0.8% more attacked detailed to the police. Moreover boost in crime rate and underemployment reducing the economy's efficiency. High unemployment can persuade xenophobia and protectionism as workers alarm that foreigners are stealing their professions. On other hand political instability and lower economic growths increases popular dissatisfaction, creates stimulus for antigovernment activities (Farmer, 2002; Gordon, 2004; Dollar& Kraay, 2002; Wickens, 2008; Knotek, 2007; Abel & Bernanke, 2005; Prachowny, 1993).

1.2 Statement of Problem

Although most scholars focus on the economic and politics sources of habitual unemployment, this research focuses on policy analysis and comparing of parties policies about this issue in Australia, which count as one of the successful country to deal with unemployment, the researcher mainly focuses on comparing employment policies in different major parties in Australia in different stages of policy cycle, as the researcher think unemployment cannot be explained solely by economic or politic approaches. Unemployment persists because policymakers are not willing to introduce the employment policies on time, politically they may not be capable of bearing the possible costs of employment in the short-term, and so they keep delaying it. On the other hand using policy cycle which designed to promote a systematic approach to decision making, cannot warranty excellent policy, but it does persuade rigor and avoid basic mistakes. This paper compares the parties' policies to analyze and understand Why and How policymakers keep on implementing various employment policies, In order to explain employment policies researcher will supplement economic and political views of employment policies of Australian parties with a policy analysis approach.

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Unemployment not only has been a widespread economic problem with important repercussions, but also different approaches to this problem through history reflects shifts in economic and politic ideas, A comparison of the Australian parties can provide a good understanding of the bases of success in eliminating persistent unemployment. Most of the debates on employment seem to have been settled in favor of the neoliberal view that favors employment over other economic and political goals. This study makes us more aware of the policy analysis of employment policymaking (Wickens, 2008; Knotek, 2007).

While some scholars have studied the effects of the political regime type, political system, electoral and party system, this is one of the few studies that compare the parties' economic policies in context of policy analysis. To the researcher knowledge, this study will also be the first one for case of Australian parties.

Researcher at this paper mostly focus on employment policies in different major parties on Australia included Australian Labor Party, Liberal Party of Australia and National Party of Australia, {The criteria of the selection were: First; they must have dedicated policies. Second; they must be having seat at parliament. Third; they must operate in at least one state.}, during 2002 to 2010. Researcher at this paper chooses this period because of 17 repeated years of economic growth ever since 1992 - roughly 3.3 per cent a year which Australia has recorded. But why researcher chooses these parties is; the earlier a government (parties one step before they settle in office) becomes aware of the changes taking place in the economy; the sooner compensation action can be taken. Further, the more that can be known about the likely impact of various policy measures, then parties better able to determine which instruments it should use in any given situation, and how they should be used. The permanence of Australian regime controls both the perceptions and expectations of those it connects. The same is right of the way policy is shaped; policy making in Australia is typically an incremental, bit by bit, and realistic activity, such policy skills, are essential for high-quality government and reduce the risk of silly alternatives (Wickens, 2008; Knotek, 2007; Althaus, Bridgman & Davis, 2007).

Figure 1: Australian unemployment rate per percent 1990-2004

Source: Preliminary Annual Database 1900-01 to 1973-74 (Reserve Bank of Australia Research Discussion Paper 7701). Data from 1966-67 to the present is from Labor Force.

Moreover Australia is a secure society. It has recognized no revolutions and hardly any eternally discompose displeasures. Its administrative control has grown-up and firmly established figure, the main parties were shaped early and have preserved their shares of votes with grand steadiness; the machines of administration has go through merely gradual modify; and even the issues of Australian politics have a long history for such a young country (Althaus, Bridgman & Davis, 2007).

In sum, Knowledge of analyzing parties' policies is still a complicated process. From the literature review, several points can be observed. First, no significant research on comparison of employment policies in Australian parties have been documented yet. Second, there is lack of knowledge on analysis of parties' employment policies and last problem there are no empirical study in context of policy cycles about employment policies.

1.3 Research Questions

What are the concerns in agenda setting for these 3 parties when they promote their employment policies?

Which factors must be significant for these parties when they formulate and adopt their economic policies?

What are the instruments of these 3 parties in design making?

1.4 Research Objectives

To figure out and compare different concerns of these parties in stage of agenda setting

To addresses the significant factors which these parties follow in formulation of employment policies

To compares different kind of instruments of these 3 parties in making law.

1.5 Significant of study

There are three major significances at this study:

Parties: the scope of this research is parties since a great deal of political Scientifics

written about unemployment policies in level of government, administrative or central bank, this paper going thorough parties, as researcher believe as earlier politicians becomes aware of the changes taking place in the economy, the sooner compensation action can be taken. Further, economic situation should be important for parties; Politicians win or lose the office as a result of their economic policies.

Policy analyzing: A vast empirical literature written about unemployment in context of economy or politic this paper investigates unemployment in context of policy analyzing. The more that can be known about the likely impact of various policy measures, the governments better able to determine which instruments it should use in any given situation, and how they should be used. For sure, even the good economic or political ideology without good structure and base, will be unsuccessful to achieve the goals.

Australia: this country is among developed countries with high rate of economic growth and acceptable rate of unemployment with strong economy, Australia was the 13th largest national economy by nominal GDP 's per-capita In 2009, The state was titles second in the United Nations 2009 Human Development Index and sixth in The Economist worldwide quality-of-life index 2005, Australia's GDP is faintly lower than that of the UK, Germany, and France in conditions of purchasing power parity (Factbook, 2009). To the researcher knowledge this is the first documented study about employment policy analyzing among Australian parties.