Australia faces the mutually reinforced challenges of boosting labour supply and promoting social inclusion. Labour underutilisation is especially prevalent among groups such as lone parents, people with disability, and Indigenous Australians. These are also groups at greatest risk of social exclusion. Thus better integration of these groups into the labour market would enhance inclusion. In general, labour utilisation can be increased by training, improving the functioning of labour market institutions, reforming the tax and transfer system, and maintaining labour market flexibility. Beyond labour market policies, the multiplicity, inter-relatedness and complexity of social inclusion problems call for a comprehensive and integrated approach focusing on individual needs. The elements of the strategy include an education system that better promotes equity and integrated service approaches to help people with disabilities and the homeless. Recent efforts in all these areas by the government are welcome.
