Australian Economic Institution and Performance - Coursework Example

Australian Institutions and Performances Name Institution Introduction The Australian economy has been characteristically evolutionary in nature and have undergone through rapid and significant events that have continuously changed the direction, composition and the dynamics of the economy. Although the Australian economy is a market-based type, the Australian economic development does not reflect the competitive market of the neo-classical standards of an open economy. However, it has been constricted by the institutional and social policies which have been challenged by the emerging growth and economic complexities over time (Arup, 2006). The historical aspects of the Australian economy are understood from the economic institutions context which has been the key combining factor of national economic development over the past decades. Being an open economy, the role of the commonwealth institutions and through their infrastructural regulations have been among the key performance indicators for national growth. In addition, the policies adopted for national competition and the role of the Australian competition and consumer Commission have greatly added to the growth margin of the Australian economy (Hor, & Keats, 2009). This paper seeks to discuss and analyze the roles of the Fair Work Commission in regulating the Australian labor market, discuss the role of commonwealth institution, and the importance of the national competition since 1995. Finally, the paper will discuss the role of the Australian Competition and Consumer Commission. Role of the Fair Work Commission in Regulating the Australian Labor Market The most important components of the labor market are the employees, the employers, and the government. The relationship between these three components of the labor market can be best explained through the industrial relations. In Australia, the relationship and the interaction between different components of the labor market, employees and employers, government agencies (interventions) and tribunals are discussed under the Fair Work Commission (Hor, & Keats, 2009). The Fair Work Commission is an industrial relations tribunal which was created in 2009 to solve and serve different labor issues in the Australian labor market. The commission was formed under the Fair Work Act of 2009 for the purpose of the industrial relations reforms that were aimed at transforming the loopholes that had overcome the Fair Work Australia (Australian journal of labor law, 2009). As an independent body powered with authority to regulate and enforce polices, the commission plays the following roles in relations to the Australian labor market: 1. Provision of safety minimum conditions The commission plays an important role in ensuring that workers are provided with the safety net of minimum conditions for instance minimum wages and allowances. According to Centre for Labor Market Research (2007), this role is important to the employees since it protects them from exploitative employers that provide poor working conditions and terms of employments. Under this role, jut like the Workplace Relations, the Fair Work commission uses the commission’s power and authority given to it by the Australian constitution to ensure it applies to the Australian employees as many as possible. Under the national standards there are minimum stipulated conditions for the Australian employees. Considering all the relevant pay rates and minimum wage orders, the commission through the National Employment Standards has adopted safety measures that are supported by the constitution and cannot be altered (Teicher, Holland, & Gough, 2013). These measures are there for the benefit of employees. Some of these minimum conditions include the maximum working week, annual leave, long service leave, public holidays, and fair work information among many others. 2. Granting remedies for unfair dismissals It is very unfair and unreasonable to dismiss employees without prior notice and warning. In the event that the employer feels that the evidence calling for dismissal is sufficient enough to ensure immediate dismissal, like theft, fraud, violence, or breach of specific terms and conditions, it is only fair to be informed in prior. An unfair dismissal is a situation which occurs when an employee makes an unfair dismissal remedy and after the Fair Work Commission investigates into the matter finds that the employee was unfairly dismissed (Hor, & Keats, 2009). A remedy is granted in the event that the dismissal was harsh, not a case of genuine redundancy, and not consistent with the business fair. The employees who are covered with by the national workplace relations systems stand higher chances of being covered by the unfair dismissal laws. A minimum employment period must be completed by the employee in order to be eligible to apply for the unfair dismissal. In this case, a harsh and unreasonable dismissal is considered in terms of the reasonability of the dismissal, prior notifications, and other relevant information that may have led to the dismissal. 3. Industrial Action Industrial action refers to any collective measures taken by the trade unions and other organized labor unions which are meant to reduce the productivity at workplace. These industrial actions include the steps that workers of a particular firm or workers of collective firms take, such as strike or work to rule, in order to enforce their demands and press their grievances to the concerned parties. In most case, the industrial action takes place in the events of labor disputes and takes place for the effectiveness of social or political change (National Book Council (Australia), 2011). Under such circumstances of industrial actions, the Fair Work Commission has regulating powers on the taking of such actions (Hor, & Keats, 2009). Through clear provisions of the law and regulations, the Fair Work commission takes charge of the grievances and make step to solve the dispute, particularly concerning the labor disputes. 4. Facilitation of good faith bargaining and enterprise agreements (enterprise bargaining) The most critical role of the Fair Work Commission is its facilitation of the good-faith bargaining. This involves primarily each party to making sincere effort in the labor negotiations. According to the Fair Work Act 2009, good faith bargaining is meant for various sets of duties. They include: i. Attending and participating in the meetings at reasonable times, ii. Disclosing relevant information, iii. Responding to proposals brought by other bargaining representatives, iv. Giving out genuine proposals, v. Refraining in the conducts that undermines the freedom of expressions and association, vi. And finally recognizing and bargaining with the other bargaining representatives for the purposes of agreement. The other roles of the Fair Work Commission include, resolving different disputes ranging from individual to collective workplace disputes. The commission employs different levels of conflict resolutions like reconciliations, mediation, and arbitrations in some cases depending on the nature of the disputes (Teicher, Holland, & Gough, 2013). The Fair Work commission also has a role in functioning as the connection with the workplace determinations, equal remunerations, transfer of business, and workplace protection in general among others (Hor, & Keats, 2009). Roles of the Commonwealth Constitution changes in the transport and communications sectors of the Australian economy One of the major measures of the communal wellbeing is the investment on the economic infrastructures like the transport networks and telecommunications. The Australian economy has benefited from the investment frameworks and regulation settings by the commonwealth constitution based on the transport and communications infrastructures (Newton, 2008). More importantly, it is also true that commonwealth governments have myriad effects and influences in terms of the provisions of such infrastructures, Australian government no exceptions. According to Cocklin (2005), the Australian governments towards the end of the 20th century, in conjunction with the commonwealth, and the state went through restructuring more extensively, although the process still continues to date. This restructuring was in form of the changes in the organizations, workplace relations in the public sectors, employment conditions, management, and personnel management in the public sectors among others (Organization for Economic Co-operation and Development, 2010). The change has also encompassed restructuring some of the enterprises in the communications and transport sectors of the Australian economy. The following points explain some of the roles played by the Commonwealth Constitution in setting the framework for some of the regulations and changes in the communications and transport sectors of the Australian economy. Towards the end of the 19th century, the Australian governments’ states adopted the philosophies of the interventionists, and intervened in the economic growth and development projections. From 1901 after commonwealth constitutional frameworks on particular development and investments issues became clear within the member states, a comprehensive development system were adopted. Tariffs were introduced and the end result was that it provided finances to the government services. It was also one of the policy weapons or instrument for inducing and fostering manufacturing industries in Australia. It also acted for the employment creation portion. The changes in the commonwealth constitution also fostered the operations of the public sector itself through reforms that took place in the public sector management. The elimination of the corrupt influences and practices, especially in tendering in the communication and transport sectors, and the introduction of competitive recruitments improved management practices in the public sector of the Australian economy (Nethercote, 2001). More than that, the constitutional framework of the commonwealth provided for the scientific management designs, work allocations, and staff organizations, a practice which fostered efficiency and growth in the transport and the communication sectors (Organization for Economic Co-operation and Development, 2010). Through the commonwealth constitution, the government intervention role was recognized and the market approach system of the economy gained confidence. The commonwealth boosted the government’s efforts to promote competition in the product and service market, particularly in the tendering in the transport and communication services in Australia (Zurich, et al., and the Commonwealth Business Council, & Commonwealth Secretariat, 2000). The government intervention in this sector was to ensure that the infrastructural developments in these sectors meet the demand and improved services. It was also realized that most private markets could not offer public goods like street lighting, thereby rendering the government involvement necessary (Newton, 2008). Most of the commonwealth influences and roles in the infrastructural developments in Australia are traced from the commonwealth constitutional responsibilities in the telecommunications and transport services (Moon, & Sharman, 2003). The commonwealth financial capacity makes it extend its influences since the section 96 of the constitutional provides for its role in providing the financial assistance to the state territories in areas such as transport and communications system. Through these financial assistance, the commonwealth fostered massive growth in telecommunication, aviation services (especially air navigations), national and local roads (both rural and urban), railways system development, and postal services. Commonwealth roles in infrastructural provisions were felt through their investments in the GBEs (government business enterprises) and other agencies. Its roles were also very significant in the provision of funding to the state and territories through payment of several infrastructural national projects and purposes (Nethercote, 2001). Commonwealth became the major source of the transport and communication infrastructural development funds for the state and territories, which amounted to over $2.5 billion by 2003, with transport and communication constituting the major components for the funding. It also formulated polices framework and provided efficient systems such as taxation provisions and the National Competition Policy (Newton, 2008). These policy frameworks which were formulated by commonwealth provided regulatory guidance upon which other governments and the private sectors made investment decisions. These regulations also played major roles, particularly in the infrastructural provisions like the Income Tax Assessment Act of 1936, National Competition Policy, and the strategic setting involvement focus for the transport and communication sectors of the economy. Road and communications funding programs have become one of the basic components of the commonwealth funding of the infrastructure (Newton, 2008). In this case, commonwealth funds the national highways constructions and maintenance, roads of national importance, black spots programmes, and the roads to recovery programmes. Considering local governments as extension of states, commonwealth also provides funding supports to the local governments’ roads programmes in form of grants. Finally, in discussing the commonwealth roles in influencing infrastructural developments, new trends have emerged. There have been reduced relative importances of the government business enterprises though privatization. However, even though the sale of leases of major airports in Australia has tried reducing the importance of the GBE’s, the pace of privatization in the transport and communication sector has reduced (Nethercote, 2001). In addition, commonwealth influences is still felt in the provision of policy frameworks, particularly concerning effective decision making in the major transport and communications developments. Commonwealth also played a major role in the industrial development through the tariff protections. The Importance of National Competition Policy since 1995 and the Role of the Australian Competition and Consumer Commission The first step of achieving an open Australian economy was through microeconomic reforms in the 1990s Australia under the National Competition Policy. The government initiatives in the early 1970s and 1980s to promote national productivity was to be effective through economic liberalization in terms of cutting across board tariff of 1973, the elimination of foreign exchange control, and the floating dollar of 1983. Among the critical step-stones of the microeconomic reforms of the commonwealth and the State were the industrial initiatives of government business Enterprises Corporation as well as a reduced regulation in the transport and telecommunication sectors (Srinivasan, & Wallack, 2006). During the early 1990s, there was an increased need for microeconomic reforms after the Hilmer report, which advocated for an extension of the reach of trade practices, introduction of competitive neutrality that reduce the advantage of government businesses, review of all laws that restrict completion, and extension of prices surveillance to the state. The following discussion addresses the importance of the national competition policy since 1995 (Rowatt, Lubrano, & Porrata, 1997). It will finally address the roles played by the Australian Competition and consumer Commission. The National Policy provides for the extension of the reach-ability of the trade practices acts for fairness to all business so that the business competitive conduct rules are followed by all business enterprises in Australia including those that are of the government. The provision of fairness is a key microeconomic principle, particularly in the market, and allows for quality, developed, and efficient service and product deliveries in the economy (Holzhacker, & Haverland, 2006). The National Competition Policy led to the introduction of the competitive neutrality in the sense that government businesses could not have unfair advantage in competition for the market with the private firms. It also set open the access of the private business to the nationally important infrastructures. The national policy on completion reduced monopoly in business through restructures in the market competition regulations and reviews of completion laws, thereby increasing competition among business enterprises in Australia (Arup, 2002). Finally, in order to control prices and protect consumers, the National Competition Policy extended price surveillance by the states and Territory government and catered for review of inadequate reforms. Upon the merger between the Trade Practices Commission and Price Surveillance, the Australian Competition and Consumer Commission was formed in 1995 with an aim of implementing the reforms on the National Competition Policy (Competition policy in OECD countries 1993-1994, 1997). The following were the roles of the Australian Competition and Consumer Commission: i. To foster the Trade Practices objective of enhancing welfare among the Australian in terms of promoting competition and fairness in trade. This also includes the provision of the consumer protection from exploitations by producers and firms. ii. The commission enhances mergers and acquisition of companies’ issues, covers the anti-competitive and unfair market practices, product safety as well as [providing for the access of the third party to the significantly important national facilities. iii. The commission also plays an important role in vetting proposed prices of businesses placed under surveillances, inquire pricing practices in the market, and monitor prices, costs, and profits of an industry. iv. The commission protects consumers, a role which complements that of the state and territory consumer affairs agencies. In conclusion, it is important to realize that the key aspects of the National Competition Policy were to induce fairness in the market and restructure the market through the recommended reforms in Australia (Doern, 1999). Despite weaknesses of some of the reforms, they stood out to ensure the Australian economy remained open for the rest of the business community. The microeconomic reforms had substantial effects on the economic growth and productivity of Australian economy and best explains the strong economic projections of the Australian economy by 2000. References Arup, C. (2002). Competition policy with legal form: Reviewing Australian and overseas experience. Leichhardt, N.S.W: The Federation Pr. Arup, C. (2006). Labour law and labour market regulation: Essays on the construction, constitution and regulation of labour markets and work relationships. Annandale, NSW: Federation Press. Australian journal of labour law. (2009). Sydney: Butterworths. CCH Editors. (2010). 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National Institute of Labour Studies (Australia), & Flinders University. (2004). Australian bulletin of labour. Bedford Park: Flinders University National Institute of Labour Studies. Nethercote, J. R. (2001). Liberalism and the Australian federation. Leichhardt: Federation Press. Newton, P. W. (2008). Transitions: Pathways towards sustainable urban development in Australia. Dordrecht, The Netherlands: Springer Science. Organisation for Economic Co-operation and Development. (2010). Regional Development Policies in OECD Countries. Paris: OECD. Rowatt, M., Lubrano, M., & Porrata, R. (1997). Competition policy and MERCOSUR. Washington, DC: World bank. Srinivasan, T. N., & Wallack, J. S. (2006). Federalism and economic reform: International perspectives. New York: Cambridge University Press. Teicher, J., Holland, P., & Gough, R. (2013). Australian Workplace Relations. Cambridge: Cambridge University Press. Zurich, A., Cairns, E., Ramaphosa, C., Commonwealth Business Council., & Commonwealth Secretariat. (2000). Globalisation: Policies, strategies and partnerships : the summary report of the Commonwealth Business Forum in London, 18-20 september 2000. London, En: Commonwealth Business Council. Read More