Closing the Gap? The Role of Wage, Welfare and Industry Policy in Promoting Social Inclusion

Abstract

Australia's social policy regime has been described as `social protection by other means' (SPM). Its foundation is attributed to the Harvester Judgment's minimum wage decision and is said to have persisted more or less successfully from 1907 to 2005 when the Howard Government passed industrial relations reforms known as the Work Choices legislation. This proposed that wage minima should be determined more by what the market can afford than previous welfare criteria. In 2008 the new Labor Government will need to revisit the role of the minimum wage in relation to social policy. Many see SPM as a failed model in the context of economic globalization and propose that Australia must reckon with creating a new European-style welfare state system of `flexicurity'. This article proposes that the perception of a crisis in SPM is fundamentally mistaken. Australian welfare has been far less reliant on wage determination than has been supposed and points towards a socially inclusive policy framework that is readily attainable.