Investing in people is the path to full employment

Table 2: Labour market indicators, Denmark and Australia

Second, given the Australian Government’s massive budget surplus, there is scope to increase public expenditure on active labour market policies. And in this regard, it should be noted that having more people in employment also provides a benefit through more taxation income for the government and less expenditure on unemployment benefits, resulting in lower net public expenditure.

Third, in terms of principle, the adoption of active labour market policies as opposed to WorkChoices style labour market reform indicates how a government values people. It indicates whether a government prefers to devalue the economic worth of people, or invest in people.

At a time when investment in “human capital” is gaining increased support and governments are becoming more aware of the need to invest in people, active labour market policies are likely to become a very attractive option, especially for governments on the progressive side of politics. If a future Australian government is determined to deliver full unemployment, it should look to the example set by Denmark, and investigate how active labour market policies could be implemented in Australia. That way, we can move further down the path to full employment, but not at the expense of fairness in the workplace.