Key Economic Organizations in Australia - Coursework Example

AUSTRALIAN ECONOMIC INSTITUTIONS AND PERFORMANCE Student: Institutional affiliation: Introduction The economy of any country can be broken down into industries, companies, trade unions, government bodies, non-government organizations, consumer unions and the societies. Each of the above sections of the constitution has its own part to play in ensuring that the policy-making exercise is effective and that the policies made are implemented by the relevant authorities. The work that is done by the legislature underscores the struggles of each organization. While each of the participants in the economy will do the best to fulfill its part, there is always need for the public to exert pressure so that no one will relent or be reluctant in policy making and policy implementation (Breen, & Antony, 2012). The civil society, trade unions, and human rights activist are best known to carry out the latter process. Each of the groups and persons has to work under the principles and ethics that have been set out whether they are contented or not (Mary, 2012). The Australian economy is the 13th largest according to the comparison of the nominal GDP which is rated at 6.4 trillion dollars. In all the capitalist economies, the Australian economy is the largest. The ratings on its imports and exports tie at 19 worldwide. The economy is largely driven by the service sector (68%) with mining sector coming a distant second at 19% (Mary, 2012). With this view, the analysis of the key economic organizations (both local and international) that have a hand to play in the Australian economy will most certainly lead to; an understanding of a capitalist economy, evaluation of the ability of the service sector to support the economy, development of a clear picture on how to create a balance between imports and exports, and, an understanding of the forces behind the top-twenty (G-20) economies (Celal, 2011). In this paper, we sample some of the key economic organizations in Australia with an aim of disambiguating the capitalist economy and showing how the economic forces balance themselves. Explain the role of the Fair Work Commission in regulating the Australian labor market. Fair Work Commission formation and membership In ensuring that the mandate delegated by the electorate to them has been executed in the latter, the ruling Labor party under the leadership of Prime Minister Kevin Rudd came up with a body that would centralize work that was earlier on done by three bodies (Mary, 2012). The Fair Work Act 2009 formed Fair Work commission to replace the Australian Industrial Relations Commission. Apart from carrying out the duties performed its predecessor; the Fair Work Commission also performs duties formally done by the Workplace Authority, and the Australian Fair Pay Commission (Breen, & Antony, 2012). The commission has one president, two vice presidents, twenty deputy presidents and twenty three commissioners. In the sections below, the independent work of the commission to ensure that all the labor relations in all industries are streamlined is further explained. As noted in the introductory part of this paper, 68% of the economy is driven by the service sector thus labor relations are central to the economic development and stability (Celal, 2011). Collective bargaining under the Fair Work Act Prior to the enactment of the law, the labor relations were saturated with individual Australian Workplace Agreements which were based on the legal Work Choices legislation. The Act appreciates that no single worker can be able to aptly represent his case to the employer without jeopardizing his employment contract. Thus, the commission was tasked to come up with minimum wages for the various categories of industries in the country (Breen, & Antony, 2012). The Act gave more power to the trade unions to settle for the agreements between the employers and the employees. The move is aimed at ensuring that, the agreements made lead to equitable distribution of wealth in the country with the recognition of the employers’ investments and the employees’ labor; with each getting the due reward. Good-faith bargaining The Commission is also mandated with the supervision role that shows commitment and good faith on either party that is participating in agreement making process. This includes attendance of the forums which are aimed at coming up with the said agreements and also ensuring that each party makes disclosures that if withheld will be deemed as misrepresentation of facts and thus parties may make uninformed decisions. This role is aimed at ensuring ethics are utilized during and after the relevant agreements have been reached (Mary, 2012). Bargaining orders The Act gives the commission the power to make a determination that is related to labor agreements if it is satisfied that one party in the agreement did not meet the minimum requirement of good faith. The powers however, are exercised after the provisions for submissions of various admissions and reasons are not given in good time (21 Days). These powers are contained in Section 269 of the Act which is implemented concurrent with Section 235 of the same acts which gives the commission the power to order any party to labor agreements to surrender certain reasons and submissions that explain non-performance of an agreement. Bargaining agents The Division 3 of the Fair Work Act 2009 gives the rights of representation to each of the parties involved in a case before the commissions. A notice to appoint a representative is given not later than 14 days to the forum where the issue shall be held. The commission is given power to ensure that the employeeorganizationsdo not take advantage of the plight of some employees, appointing themselves as the agents to such issues (Mary, 2012). By ensuring that each party has been accorded the right of presentation, the Commission creates a fair playing ground for all the parties to an issue before it. The representation is done in consideration of the flexible nature of the commitments of each party. However, the Commission must ensure that, the representatives do not use their “power of attorney” to deny the parties involved in the issue their rights. Considerations of minimum salary, basic rights of the parties involved and other such issues should never be overlooked even with representation (Celal, 2011). The parties are allowed to appoint themselves as the agents or their organizational employees or any other person identified in writing. The representation is mainly intended to create room for negotiations while at the same time ensuring that the economic activities involving various parties are also not halted. With an economy that is dependent on the service sector, each moment lost counts and thus the representations indirectly supports the economic growth. Equality bargaining The word equality in the context of the Fair Work Act, 2009 refers to the opportunities that are given to the women in the society. The commission is mandated with the role of ensuring women get equal opportunities as their men counterparts in the working environment. The representation and the bargaining orders referred above must be in consideration of the gender factor in formulating the employment agreements. Parental leaves and maternity leaves must be included in recognitions of the place of woman in the society and the biological factors of the women. However, the commission is also mandated to ensure that women do not misuse their status to the disadvantage of the employer. This calls for the good faith bargaining when recognizing the equality bargaining clause. Div 5, Fair Work Act 2009 cites out the improved parental leaves aimed at creating a balance between the two conflicting interests of the women workers and the employers. Given the WTO’s commitment to the most-favored-nation principle of non-discrimination, why do bilateral trade agreements continue to proliferate? In your answer, evaluate whether such agreements strengthen or weaken the international trading system? World Trade Organization The balance of international trade is jeopardized by the facts that, the national GDP of the participating countries varies. This creates uneven playing ground for the developing countries which are not favored by the economies of scale. It is against this backdrop that World trade Union was founded in 1995 replacing the 1948’s General Agreement on Tariffs and Trade. The international organization allows voluntary membership of countries whose government representatives must sign the agreement. Also, the legislature must pass laws that allow participation of the country in the organization (Celal, 2012). Most-favored-nation principle of non-discrimination As the phrase connotes, Most-Favored-Nations refer to nations which have an economic advantage due to the stature of their GDP. This gives the same nations competition in international trade. The world trade organization ensures that any trade agreement recognizes the competitive advantage of these nations and that the favored nations do not use their economic muscle to force the un-favored nations into making deals that would not have been made if the countries were at a level economic situation (WTO, 2011). In this regard, the organization advocates for nations to lift barriers that lead to unfair market share between the most favored countries and the developing countries. The principle is however recognizant of the fact that most nations have already entered into numerous trade agreements in the regions like the European Union in Europe Common wealth in Anglophone countries, and COMESA in east and central Africa. The member states of World Trade Organization can use the provisions in the international trade agreements to lift search barriers (WTO, 2011). Why do bilateral trade agreements continue to proliferate? World Trade Organization favors multilateral trade agreements above bilateral trade agreements. The probability of a bilateral trade to benefit one side of the agreement is very high. However, the international trade is still saturated with bilateral trade agreements such include the Dollar- standard agreement between America and China, ASEAN – Australia – New Zealand Free Trade Area (AANZFTA), and the Australia–China Free Trade Agreement. There are two dimensions that the bilateral agreements can take; an agreement between a most favored nation and disadvantaged nations, and, a bilateral agreement between two most favored or disadvantaged nations (William, 2011). An agreement between a most favored nation and a disadvantaged nation in most cases lead to the disadvantaged nation being lured into making deals that will only increase favors to the developed nation. On the other hand, an agreement between two most favored nations will increase their production power and thus create a bigger gap between the developing world and the developed world (William, 2011). While the government may be willing to live by the spirit of the World Trade Organizations, there is no doubt on the progressive nature of economy and that the expectations of the people from their leaders are multiplication of the GDP and creation of a platform for wealth creation for the electorate. The balance of these factors will mostly lie with the political leaders who will rather settle for bilateral agreements which may not be in line with the statues of the World Trade Organization than lose their popularity (William, 2011). The priority that is given to personal issues by the electorate over-exceeds the need to create fair market for all the countries. While World Trade Organization has come up with a clear and workable policy on the regulation of international trade, the organization lacks powers necessary to execute the same policies. The balance of the economy is mostly handed to the political weights in the country and regions. Also, different government find direct international ties more binding than the commitment to the World Trade Organization Statutes (William, 2011). A case study of the in-progress Australia-China Free Trade Area shows that if the agreement is executed, both the economies of China and Australia will shoot at a very high rate. Currently China lies second against the Australia’s 13th position (Celal, 2012). The economy of China is mainly backed by the manufacturing sector while as noted previously in this paper; the economy of Australia is dependent on the service sector. A Free Trade Area will lead to labor movement to China economy increasing the rate of manufacturing in China and movement of Machinery in the Australian economy increasing the rate of service delivery. Such agreements are not only favorable to the nationals and residents of these two countries, but are also favorable to the political leadership who will use such development as bait in future political agendas. However, the increased wealth will lead to a disadvantage to the developing countries that shall be discriminated from such free trade areas. Outline and discuss the role of the Commonwealth Constitution in setting the framework for the regulation of transport and communications in the Australian economy? Commonwealth Constitution The commonwealth constitution is used to denote the constitution of the commonwealth government of Australia. The constitution is dominated by the statutes of West minister which were adopted through the Statute of Westminster Adoption Act 1942. The constitution binds together the relationship of the Australian states and is based on the various amendments made in the series of referendums that ran between 1898 and 1900. While the constitution is all round and touches on every section of the economy, the sections below explain how the constitution regulates the transport and communication industry in the Australian economy. Transport and communications in the Australian economy Transport in Australia is dominated by rail and air transport. The main rail transport network was constructed in the nineteenth century through new rail lines have been added since. The country also enjoys over 300 airports which have paved runways. The transport sector is the pivot of the service delivery for each of the capital to states has logistical connections to other state capitals. Also, the movement from the cities and rural areas where most of the mining (19% of the economy) is done. On the other hand, the road network is an option especially in the intercity transport and within the rural areas. The road network is divided into three main sections; the federal roads that manage and maintained by the central government, the state roads which are maintained and managed by the state governments and the local authority roads. The total estimated length of the road network is 913,000 kilometers with only a third of the road network being paved. Since the 2009 dollar crises, the prices of fuel in the country have skyrocketed with most of persons opting for public transport. The options for public transport are buses, urban rail, light rail, monorail and water craft. The transportation of natural gas, petroleum services and crude oil is facilitated by the pipeline network that spans over 8,700 kilometers. Natural gas takes the highest percentage of the pipeline with over 5600 km and crude oil is second (Wesley, 2011). Currently, three constructions are ongoing for the pipeline; Goulburn River to Sugarloaf Reservoir, Wimmera-Mallee Pipeline, and, Melbourne to Geelong Pipeline. A fourth construction is also underway Rocklands Reservoir to Grampian Head-works Pipeline whose completion was expected to be 2010 but the project is yet to be commissioned for use in pipeline transportation (Ian, 2012). The Section 51 (v) of the commonwealth constitution cites out natural monopolies in the communication sector. These include the telegraphs, telephone and postal communication media. This led to the monopolistic nature of the postmaster general until the 1975 industrialization era (Michael, &Adrain, 2011). However, the current generation of communication where mobile device usage and internet based communications dominate the market is regulated partly through the Trade Practices Act 1974. The law is complemented by the Australian Communications and Media Authority (ACMA) of 2005 which was given the authority to regulate the entire player in the electronic communication industry (Hugo, & Jonathan, 2011). Air mobility and communication is under the watch of two national bodies which have distinct powers and roles; Air Services Australia and Civil Aviation Safety Authority. While the latter is mandated to register the entire airline companies that operate in Australia and maintenance of security, provision of fair play, and market supervision is undertaken by the former. The move was taken due to the privatization of the public airline companies that dominated the market prior to the 1980’s (Ian, 2012). Also, two airline companies; Ansett (private) and Trans-Australian Airways (GBE), were deregistered thus leaving the market at the hands of private players. This underlines the need to have strong regulatory bodies to avert the risks posed by a market that is dominated by private investors. Impact of Commonwealth Constitution on regulating transport and communications in the Australian economy The commonwealth constitution foresaw the tension that could come between state, federal and local governments in controlling the transport and communications industry. There are clear guidelines that show how each of the parties (governments) takes part in the management of the sector. For example, Section 51 omits air, rail, and shipping – so they are states’ matters. The federal government thus should not throw itself into a tussle regarding the control of the same (David, & Dyster, 2012). Each state has to come up with legislative acts, policies and bodies to regulate air, rail and shipping sectors of the transport and communications industry. While the above is workable, the same constitution gives provisions for states to refer its powers to the federal government. This implies that a state may decide to have the air, rail and shipping sectors in its boundaries controlled by the federal government (Ian, 2012). This is done through legislative acts of the said state. The state- when referred for such mandates must come up with regulatory policies and bodies to oversee the refereed sectors. No state is obligated to transfer the entire sector to the federal government (Wesley, 2011). As noted previously, the constitution marks the communication industry as having natural monopolists. Thus the regulation and running of the post, telegraph and telecommunications have been assigned to the commonwealth government by the constitution. It is against these powers that the Australian Communications and Media Authority (ACMA) were formed. The federal government has to consider having a close working mechanism with the state governments in the regulation of the communication industry (Ian, 2012). The constitution recognizes the need for the mobility and communication between the states to be enhanced. Thus, the commonwealth constitution has created a provision for the states to form an interstate commission that can create uniformity of similarity in the policies formulated in transport and communication. This clause has already been used twice in formation of the interstate commission; in 1912 and in 1984 (Wesley, 2011). Conclusion The three economic sectors that have been focused in this paper give a clear picture of how the economy of the country is run. The close to 70% of the service sector needs to Fair Work Commission to regulate it. Otherwise, the country may face a dilemma of a great workforce that is underpaid or an economy that is at risk of industrial battles (Ian, 2012). The four main roles of the organization identified create a room for fair play for both the employers and the employees. Entry into international trade agreements and participation in international trade organizations are part of the Australian economic success story since the balance of the two has led to the near optimization of the country’s production capacity. The transport and communications sector are the backbones of the economy since they create mobility of the factors of production in time and at the needed place. The recognition of the robust and complex nature of the Australian economy (especially the transport and communication sector) by the constitution has helped to avert any tussles between federal, state and local governments that could otherwise lead to a reduction of the pace of economic growth (Ian, 2012). References Breen, C. & Antony, F. (2012). Rediscovering Collective Bargaining. New York: Routledge Celal, B. (2011).Japanese Hybrid Factories in Australia.New York: Sage Celal, B. (2012).Australian Economy and Neo-liberalism.Australia: Cengage learning David, M. &Dyster, B. (2012).Australia in the Global Economy: Continuity and Change. New York: Sage Ian, M. (2012).The Australian Economy: Will Our Prosperity be Short Lived? Australia: Sage Ian, W. (2012).Why Australia Prospered: The Shifting Sources of Economic Growth. Australia: Willey Hugo, G. & Jonathan, K. (2011).The Australian Economy in the 2000s.London: Willey Mary, C. (2012). Australia. China: Raintree Michael, B. &Adrain, W. (2011).Research Handbook of Comparative Employment Relations. Sydney: Wiley Wesley, M. (2011).There goes the Neighbourhood: Australia and the Rise of Asia. Sydney: Read What You Want William, J. (2011). Non-discrimination in the World Trade Organization. The Netherlands: MartinusNijhoff Publishers WTO, (2011).Trade Policy Review: Australia 2011. Washington: Author Read More