ABSTRACT Since the 1990s, Australia, like other OECD countries, has deployed active labour market policies (ALMPs) to assist unemployed individuals into employment. Extant scholarship in economics and other disciplines demonstrates the limitations of ALMPs, particularly for individuals who are long‐term unemployed and with multiple, complex barriers to employment. Critiques hinge on the limitations of the predominant supply‐side approach focused on case management and preparing individuals for employment without accounting for the behaviours and practices of the demand‐side (employers). This article argues that a reorienting of ALMPs towards the demand side is urgently required and proposes a blueprint to take this forward.

ABSTRACT This article (i) provides a brief history of how the employment services system in Australia has come to fail jobseekers with high barriers to employment; (ii) presents an overview of the elements of a successful programme for those jobseekers; and (iii) makes recommendations on how to make progress on improving the system for delivery of employment services, building from the Hill report'.

ABSTRACTThis policy forum examines the Australian NAIRU, a key measure in describing the relationship between labour market slack and inflation, through four complementary lenses. First, Borland and Harris evaluate the RBA's dashboard‐style, narrative approach to gauging labour‐market slack. Second, Ballantyne and Cusbert estimate a state‐space model that points to a current NAIRU near 5% and weaker feedback from past inflation. Third, Gross tests alternative state‐space specifications, clustering the NAIRU in the 4%–5% range and supporting a 4.5% benchmark. Finally, Dawkins and Garnaut propose a pragmatic test: tighten conditions until wage pressure lifts inflation. Together, the papers compare methods, weigh the evidence, and set out the policy trade‐offs in today's NAIRU debate.

ABSTRACTThis article reviews the RBA's use of indicators (descriptive information) to assess spare capacity and full employment in Australia's labour market. Three main topics are addressed: the choice of indicators; how to interpret the meaning of each indicator for assessing spare capacity; and how to aggregate information from the indicators to come to an overall judgement on the state of the labour market.

ABSTRACTThe introduction of inflation targeting has seen long‐term inflation expectations become much more anchored than when models of the non‐accelerating inflation rate of unemployment (NAIRU) were conceived. This changes how we should interpret the NAIRU and inflation dynamics over the short‐to‐medium term. We update the model in Cusbert (2017) to allow for structural breaks upon the introduction of inflation targeting in Australia, finding long‐term expectations have become relatively more important for inflation dynamics, and inflation has become less volatile. We use the model to conduct scenarios that highlight the importance of expectations formation for short‐to‐medium run inflation dynamics. The scenarios illustrate how anchored inflation expectations improve the short‐run trade‐off between inflation and unemployment and change inference about the NAIRU – observing falling inflation or wage growth cannot be used to infer that unemployment is above the NAIRU.

ABSTRACTThis article examines the concept of the non‐accelerating inflation rate of unemployment (NAIRU) and its application in Australia. We review its theoretical origins, international and domestic development, and the Reserve Bank of Australia's model‐based estimation approach. Using three different NAIRU models, we evaluate whether recent labour market outcomes support a lower NAIRU than the Bank's published 4.5 per cent benchmark. The findings suggest that while some indicators point to a modest decline, the central estimate remains near the RBA's official figure.