Restocking the Economic Toolkit: Changes to Social Policy and the Ability of the State to Manage the Economy (Essay‪)‬

Recent election campaigns have been dominated by the theme of 'responsible economic management'. Both major political parties have sought to take credit for the long economic boom in Australia. Yet, increasingly financial markets and economic commentators see governments and politicians as largely irrelevant to the task of economic management. Decades of deregulation and privatisation have removed, or placed political constraints on the use of, many of the traditional levers of economic policy. The efficacy of the new policy-free economic model remains contested by political economists. Many continue to argue for more traditionally interventionist approaches, from a formal industry policy (Stilwell 2000) through to more radical interventions (e.g. Frankel 2002; Mitchell & Mosler 2002). Many of these proposals have merit. However, within the current framework, policy options are confined.