In the housing cycle which started in 1996, Australian house prices have risen more than those in the US, prima facie suggesting that Australian prices should fall sharply. This paper questions that simple hypothesis. The reasons explored are: Australian prices have risen significantly less than those in coastal California, the more valid comparison; the Australian housing finance system contains fewer of the structural weaknesses of the US system; fundamentals in the form of the decline in real interest rates explain most, but not all, of the price rise; and macroeconomic conditions for housing in Australia are more favourable to weathering the global financial crisis.

With the ascendancy of neoliberalism, the Australian state has not only remained strongly interventionist but has also expanded its sphere of influence and scope of activity. This is contrary to claims of a reduced, withered or slimmed neoliberal state. The Australian state's interventions have become increasingly varied in the overwhelming pursuit of structural competitiveness. It has developed an extensive ‘micro-structuring’ role, particularly through the creation of new regulatory instruments and institutions, but has not relinquished its economic ‘macro-structuring’ role notwithstanding changes to macroeconomic policy priorities. The Australian state's interventions have shaped all institutional forms comprising the mode of régulation that guides and supports the accumulation regime. This article discusses the reconfiguration of the Australian state and the forms of its ongoing interventions which have secured and sustained the contemporary growth regime.

The driver of the current crisis is the collapse in domestic aggregate demand, originating from international factors. It is important, therefore, to consider potential areas where aggregate demand can be expected to increase in order to understand the possibility of recovery. The current crisis was preceded by an unprecedented increase in the level of household debt, which will hinder the recovery of consumer expenditure. Consumption is also being affected by uncertainty with respect to both income and employment. Similarly, the outlooks for investment and net exports suggest that they are unlikely to contribute to the initial phase of recovery. This leaves the important area of government expenditure. It is argued that government expenditure, particularly in infrastructure and capital, is particularly important as in the short run it contributes directly to demand, while, in the longer run it boosts growth and productivity. Finally, approaches to financing the implications of increased government expenditure are examined.

Capitalism has had many crises and often they have led to improvements in the way it has operated. Two related improvements are predicted as a result of the current crisis. One is the hastening of the decisive defeat of market liberalism. The other is the rehabilitation of fiscal policy as part of the tool kit used to minimise the inherent instability of capitalist economies. After a brief exposition of the core aspects of market liberalism, this article considers the use of fiscal policy in each of the short run and the long run. Policies around the OECD in the last 16 months have already embodied both these improvements, but a similar achievement in the long run will be more difficult. The crowding-out thesis has more appeal when applied to the longer run. However, the empirical evidence does not support crowding out. More generally, economic orthodoxy relies on neo-classical growth theory to support a belief that longer run trends in real economic variables such as output and employment are determined solely by supply side factors. The article uses the authority of Solow and Swan to emphasise that this is an assumption, not the result of any analysis, and that neoclassical growth theory itself assumes that fluctuations in investment over the business cycle will necessarily affect the path of potential output. Moreover, not only is the NAIRU (Non-Accelerating Inflation Rate of Unemployment) determined by the path of investment in physical and human capital, but at a much lower level of unemployment than the conventional wisdom believes.

One of the characteristics of the WorkChoices legislation introduced by the Howard government was the anti-union bias that permeated it. Some argue that this is appropriate because unions increase minimum wages, and economic theory shows that this will decrease employment and hence output. The Rudd government has signalled that it intends changing this anti-union bias, while at the same time restoring the role and coverage of minimum wages. This paper examines the arguments around these issues and concludes that neither side of the economic theory debate has delivered a knockout blow. The theoretical analysis is followed by a section looking at empirical evidence on the effects of deregulating labour markets. Again there is not complete consensus among the economics profession. However, both sides of the debate on the effects of labour market deregulation agree that strong minimum wage legislation does significantly reduce earnings inequality by increasing earnings at the bottom end of the distribution. The paper concludes that the increase in inequality consequent on labour market deregulation has adverse effects on the economy in the short run and disturbing longer run effects on society.

A return to discretionary fiscal policy is required in the current economic crisis. Advocacy of deficit spending is consistent with mainstream economic models, whether those relying on traditional textbook analysis or those aligned with the New Neoclassical Synthesis. The notion that deficit budgets are necessarily profligate rests on an outdated theory of public finance that ignores endogenous money. It is the productive capacity of the economy and not the government's extent of taxing its citizens, or borrowing from them, that provides the limit to the use of fiscal policy levers.

The Howard Government, supported by the Labor Opposition, legislated in 2007 to enable small businesses to engage in collective bargaining with large businesses under the Trade Practices Act. The object of the legislation is to facilitate greater equality in the bargaining power of the parties. Except where the small business sells goods/commodities rather than a service, a person who is ‘employed’ and the business that provides a ‘service’ are both effectively involved in the sale of labour or in the performance of work in the labour market. However, the legal concepts and procedures relating to collective bargaining in these two types of labour transactions are different. One, the ‘employment’ of persons, is placed in the category of workplace relations operating through labour law; the other, the ‘sale of services', is viewed as a commercial transaction, dealt with through commercial law. This paper considers the question of whether there are sufficiently significant differences between these labour/service transactions as to justify the application of two separate sets of laws to deal with them — one to cover transactions between employers and employees, and the other to cover transactions between small and large businesses. A case study will be used to illustrate the involved and unsatisfactory approach of the commercial law route in determining what is in essence a labour transaction rather than a commodity transaction.

Keeping an open mind on the severity of the financial crisis and its implications for capitalism, this article focuses on the role of the state and financial institutions in monetary regulation. Questioning whether orthodox economic theorists and policy-makers share the same world view as professional and central bankers, it argues that the monetary system has in the past twenty years been stabilised through trust relations, rather than by markets. Furthermore, in this process, which was not sufficiently recognised by the practitioners, such trust relations were unable to cope with the impersonality of money. The nub of the question about a ‘crisis of capitalism’ is how nation-states can possibly control money — the most anarchic and global social relation in the world today. The article questions Keynesianism and economic liberalism alike, by asking if it is possible for states to force global banks to take the risks of lending for development. It argues that the real focus of attention needs to be the practices of complex international banking networks and the way ‘banks march in step’.

The privatisation of economic infrastructure in Australia that began in the 1980s has continued to be actively pursued by state and federal governments. Evaluations of the effects of the change of policy, ownership, control and regulatory arrangements that have accompanied privatisation and their impact on the longer-term stock of infrastructure and the growth of the economy have received less attention than the immediate privatisation decisions. This article reviews some of the studies that have been carried out to evaluate the impact of privatisation, focusing on long-term impacts on infrastructure provision. In particular, it discusses the myopia created by the emphasis on commercial transactions and managing markets that continues to shape the debate about the provision of infrastructure to meet Australia's economic, environmental and other objectives. Objectives have become even more difficult to achieve as an increasingly extensive and complex regulatory framework is required to manage privatised activities. This adds to costs and limits the potential for the introduction of new initiatives to address pressing problems. The issue is increasingly relevant, given the current perceived shortage of infrastructure and the flow-on effects of the current international financial crisis on Australia. The slow-down in economic growth accompanying the financial crisis is putting pressure on government budgets and threatening to perpetuate the existing policy bias towards short-term solutions, exacerbating the longer run problem of ensuring an adequate supply of public economic infrastructure.

Social exclusion is influencing how social policy issues are conceived, debated, researched and addressed, particularly in Europe. It has also been given prominence as a focus of the Rudd Government's social policy agenda. This paper reviews the debate over the definition and measurement of social exclusion, focusing on its relationship with poverty, defined in terms of low-income. The analysis is based on the premise that conceptual and measurement issues can play an important role in identifying causation, and thus point to the kinds of actions needed to address the problem. The argument is illustrated by drawing on recent Australian research that shows that exclusion takes many different but often inter-connected forms, and that there is a low degree of overlap between exclusion and poverty. The implications of the findings for research and policy are briefly discussed.

Public-Private Partnerships have been a popular public procurement policy in a number of countries including Australia, the UK, and New Zealand since the early 1990s. This article examines the experience of the Port Macquarie Base Hospital (PMBH), the first public hospital delivered under the Public-Private-Partnership (PPP) model in the State of New South Wales, Australia. Using a framework adapted from Macário, this study focuses on the political climate in which this PPP mechanism was implemented, identifying the underlying motives driving the use of a PPP to deliver public health services and clarifying the essential conflicts undermining the PPP process. The article covers the entire life cycle of the PPP hospital, from the initial contracting process to its eventual sale. A political desire to reduce public debt, allied with an ideology assuming private sector superiority, made this approach particularly attractive, but failed to deliver the desired outcome. The success of PPPs would appear to depend strongly on goal alignment in a multi-level political system. Auditing processes during the implementation process need to take account of the presence or absence of such alignment.

In this qualitative study based on in-depth interviews with fifteen older public housing tenants in inner-city neighbourhoods in Sydney, the life circumstances of older public housing tenants are explored. A primary aim of the study was to interrogate the notion that public housing is a form of housing tenure that is no longer worth pursuing due to it being a harbinger of misery and social exclusion for its residents. The research suggests that this conclusion is, in many ways, mythology. For the older public housing tenants interviewed, being accommodated in this tenure form was viewed as a ‘life-saver’. Despite the ever-increasing residualisation of public housing, the provision of affordable, adequate and secure accommodation in convenient locations gave them the capacity to pursue a life that they valued.

The growth of information technology has enabled the ‘off-shoring’ of many business processes, and such off-shoring has grown exponentially in the past decade. India has been a major recipient of such off-shored work. To understand the effects of this phenomenon on off-shore workers, it is necessary to understand the legal context within which such work is undertaken.

This article thus explains the labour law framework of India, from Constitutional protections down to local laws, policies and rules. It then examines labour practices, and identifies the gaps between formal labour law and actual practice in this sector. The article notes that some of these gaps between law and practice are a result of public matters, such as corruption, legal exemptions, and lack of law enforcement; but others are due to features of the sector itself, such as its newness, the types of work it offers, and the ready availability of alternative jobs.

Meeting the education and training needs of low-skill working adults will require a transformation of United States workforce development policy. A significant component of this transformation is the development of education and training programs that are crafted around the needs of these workers. Traditional classroom based learning — which is inflexible in time and place — presents a series of barriers to low-skill adults. This article documents the relationship between educational attainment and labour market status in the US. It explores the extent to which the use of technology and online learning may help to equalise access to education and training by providing learning opportunities that can better incorporate working adults' work, education and family demands.

The article examines the impact, in one Sri Lankan garment industry, of a management initiative devolving to line employees the responsibility for decision-making about workplace performance. At the time of the study, garment manufacturers in Sri Lanka faced increased pressure from international buyers to improve product quality and to meet stringent production delivery schedules, along with growing concerns from Western consumers regarding factory conditions and labour standards. One outcome of these pressures was increased experimentation with a range of quality management techniques to elicit workforce commitment to improved efficiency levels and higher quality standards. This study documents one experiment whereby production line operators rotated the role of production supervisor amongst themselves and accepted responsibility for minimising production bottlenecks, and for communicating data on workplace efficiency, product reject rates and absenteeism levels to other line operators. We found that workplace productivity and product quality increased over the 18-month period of the study, while levels of labour turnover and absenteeism declined. Nevertheless, the study also found that the increased role in workplace decision-making provided to employees also came with increased expectations that line employees would achieve higher production targets, improve quality and monitor workplace attendance.