Unemployment, labour market deregulation and the "Third Way"

Despite improved employment performance across the OECD in the late 1990s, unemployment remains a key issue for analysis and debate among policy makers. This paper outlines the experience and developing policy of "New Labour" in the UK, the philosophy of the "Third Way" associated with it and arguments advanced to persuade Australian policy makers to follow a similar course. In opposition to these attempts, the paper argues that "deregulation", to the extent that it is associated with neoliberal ideology and incorporated also into the Third Way, is not suited to the Australian situation. The paper concludes with an analysis of the current interest in Third Way policies on the part of the Australian Labor Party, in particular the proposed introduction of "tax credits" for low-paid workers. It suggests that this approach will compromise opposition to the strategy currently being pursued by the conservative Coalition Government, and will undermine the prospects of the Labor Party at the next election.