Industrial Relations Changes (1 Viewer)

[systemx]

"Under the proposed Industrial Relations changes, it is expected that the Australian economy will become more competitive."

What does it mean by the economy becoming more competitive?

 

[Jago]

less wages --> lower production costs --> lower price of goods/services --> more competitive

 

[Rafy]

It meas Australia been more competitive internationally. i.e things like exports are more attractive.

We are able to better compete with the lower costs of other nations.

This in turn benefits the economy by boosting job levels, incomes etc etc

 

[monique66]

If the price of labour is more flexible (ie with the introduction of enterprise bargaining) there will be lower prouction costs for business and this will move us closer to the production possibility fronteir (ie all resources are utalised here) If that happens business can produce at their maximum capacity- produce more effeciently- and therefore we will be more internationally competitive. That is actually probably why the govt introduced it in the first place. On a side note, if productivity is linked to wage increases there will be less chance of cost-push inflation (also maintaining our competiteveness). If we are competitive than our CAD also decreases, meaning that we can buy imports for cheaper and thus raises living standards (but has nothing to do with competition, i suppose )

 

[mattchan]

Also, the government is arguing that if employers know they can fire people more readily, employers will hire more people thus: an increase in unemployment and a more productive economy because more of your population is working

 

[monique66]

Also, the government is arguing that if employers know they can fire people more readily, employers will hire more people thus: an increase in unemployment and a more productive economy because more of your population is working

i think you mean decrease...

 

[systemx]

Thanks alot fellas, it's clear to me now.

 

[mattchan]

ahha yes i do Cheers

 

[neo o]

If the price of labour is more flexible (ie with the introduction of enterprise bargaining) there will be lower prouction costs for business and this will move us closer to the production possibility fronteir (ie all resources are utalised here) If that happens business can produce at their maximum capacity- produce more effeciently- and therefore we will be more internationally competitive. That is actually probably why the govt introduced it in the first place. On a side note, if productivity is linked to wage increases there will be less chance of cost-push inflation (also maintaining our competiteveness). If we are competitive than our CAD also decreases, meaning that we can buy imports for cheaper and thus raises living standards (but has nothing to do with competition, i suppose )

You could also argue that inefficient state based arbitration systems hamper FDI inflows. The centralisation of industrial relations is one of the corner stones of reform.

 

[monique66]

You could also argue that inefficient state based arbitration systems hamper FDI inflows. The centralisation of industrial relations is one of the corner stones of reform.

Elabourate please, i don't quite get it...

 

[Demandred]

University economics belongs at university Neo! .

 

[HayleeKate]

Furthermore: The changes put more pressure on the labour force (US!) to be worth employing and keeping employed, hence an incentive for people to work their tails off (increasing productivity) rather than under the current system, where we all get paid the same wages, whether you're the kid flogging your guts to get the job done, or the clown out the back fooling round with the capsicums... new system = byebye fools.

 

[jonnathann]

I'm not sure so correct me if I'm wrong...i don't think the changes will make us more internationally competitive because our labour costs r reduced, but it's because wages are more flexible so some industries will offer higher wages while others will offer lower wages, which would result in more resources allocated to more efficient industries, hence improving dynamic efficiency as it can move quicker -> competitive. I'm not totally sure so it'd be great if sumone cud confirm or correct it, or mayb i'm jus regurgitating wat u guys r saying ?

 

[Demandred]

Not unless it causes worker militancy.

 

[sunjet]

"Under the proposed Industrial Relations changes, it is expected that the Australian economy will become more competitive."

What does it mean by the economy becoming more competitive?

It's part of microeconomic reform, on the supply side, to improve efficiency and make Australia more competitive, which is the aim of microeconomic reform and IR changes.