ABSTRACT
Australia has a long history of government intervention into the functioning of labour markets. Labour market intervention refers to specific government regulations aimed at the labour market. These regulations might be restrictions on wage rates (award minimums, etc.) or alternatively restrictions on employment conditions such as payroll taxes, leave entitlements, occupational health and safety regulations, dismissal restrictions and so on. One aspect of labour market intervention is wages policy. This policy is concerned with the broad determination of wages either through government intervention such as the establishment of legally enforced minimum wages or through the determinations of such bodies as in the past the Australian Industrial Relations Commission and today the Fair Work Commission. The cost of labour includes not just wages and salaries but also paid leave, leave loading, compulsory superannuation and compulsory training. In the Australian case these constitute around 30 per cent of total labour costs to employers. Government intervention can have an impact on these aspects of labour costs as well as the level of wages.
