The labour market is where the demand and supply of labour interact to determine the wage rate and the allocation of labour resources between firms and industries in the economy. The stimulus emphasises the distinct trends in the labour market such as underemployment, low participation rate and high unemployment rate in Australia. The government has an active role in dealing with different employment issues by creating employment opportunities, altering wages to be equitable and other costs of hiring labour and pursuing policies to decentralise and deregulate the labour market. The Australian work force includes all the people both part time and full time employed and unemployed. The total number of employed people had a 3.3% increase in 2012 compared to 2009-10 because of the government’s introduction of the 2009 Jobs and Training Compact. This was designed to support young Australians, retrenched workers and local communities to learn new skills required to obtain new jobs. This figure has also been affected, because of an increase in part time employment by nearly 4% in 2012 compared to 2010-11. This is because of the expansion in the supply of people willing to work, especially the rise in participation rates of married women re-entering the workforce after having children. The participation rate for women increased by nearly 5% since 2007 because of an increase in child care services and the government’s Paid Parental Leave Scheme in 2011 which allows more flexibility for married workers. In 1972, the government adopted the principle of ‘equal pay for equal work’ that aims to remove gender inequality regarding income distribution. However, there is still an estimated 19% difference in the wage outcomes of women compared to men since 2011 because men are more likely to work in highly-skilled competitive sectors such as the financial sector, information technology and conglomerates that pay notably higher rates. On the other hand, the unemployment rate has increased by an estimated 5% since 2011 and is expected to increase to 5.5% as stressed in Stimulus C. This is because of cyclical unemployment or a deficiency in the total level of consumer spending due to a severe economic downturn, because of the fear that the European economic crisis will derail the Australian economy. This results in employers dismissing some existing workers and delaying the hiring of new workers in the manufacturing and plumbing industry. Recently in 2012, more than 2700 plumbers lost their jobs from the Hastie company because it has been placed into administration after a $20 million accounting irregularity derailed negotiations with banks to recapitalise the company. Fortunately, 90 per cent of the members of the Communications Electrical and Plumbing Union who worked for Hastie have kept their jobs. This is because trade unions are responsible for raising members’ working conditions through ongoing negotiations and the use of industrial actions such as strikes, to support their claims from employers. Hence, this is linked to the industrial relations that consist of the government’s Workplace Relations Amendment Act 2006 that protects employees from unfair dismissal. Through a contractionary fiscal policy stance, the government is currently aiming for a budget surplus next year where government expenditure is less than taxation. This is to lower unemployment , as well as government expenditure on welfare payments. Hence, if the budget is in surplus, it will loosen monetary policy, meaning the Reserve Bank of Australia would want to push the cash rate down to maintain full employment to smooth out economic fluctuations in economic activity by stabilising demand. Underemployment refers to the people in the labour force who are not working to their full potential. Underemployment reached a rate of 7.1% in 2010-11 because of increased casualisation and lack of skilled workers in certain industries. Casualisation of work is increased due to increased employer demands for flexibility and reduction of ‘on costs’ which are costs other than wages in hiring labour, such as superannuation. However, there are disadvantages to casualisation, especially in the area of workers being underpaid. For instance, the Fair Work Ombudsman accused Coles of underpaying $149,530 to six trolley collectors between January 2010 and July 2011. The Fair Work Ombudsman consists of inspectors to monitor and investigate complaints in workplaces to ensure compliance with the Fair Work Act 2009, which replaced the Workplace Relations Amendment Act 2006. Furthermore, underemployment can also be caused by a shortage of skilled workers as stressed in Stimulus A. This labour skills shortage is a reflection of shortages in the supply of labour in industries such as mining and construction in relation to the demand for these skills. In 2011, Western Australia had the lowest rate of unemployment which is 4.1% compared to other states in the country because of the strong labour demand due to the global resources boom that led to an expansion in mining employment and other related industries. Consequently, there is an increased use of non-wage benefits such as clothing, meal and travel allowances by employers to retain skilled labour, especially in the mining industry. The government followed this by the introduction of the Building Australia’s Future Workforce package in the 2011 budget that aims to “boost participation by improving incentives to participate in the workforce and the services available to support disadvantaged Australians to find jobs”, as highlighted in Stimulus B. Thus, the investment of “$3b in new skills initiatives over six years targets the skills investments to better meet the skills needs of the industry”, as disadvantaged groups such as young people, single parents, people with disabilities and people in disadvantaged locations were targeted. The rationale behind this is that the level of education and training qualifications will increase the supply of labour because people are more qualified for skilled jobs. Also, the productivity of labour which refers to the output per unit of labour employed over time will increase, thus resulting in an increased demand for labour. In spite of this, recently in 2012, the mining industry announced that it is going to use enterprise migration agreements to bring in 1 700 foreign workers for Gina Rinehart's Roy Hill iron ore project, which undeniably sparked controversy with unions. The available skilled Australian workers do not have the geographic mobility to transfer locations, decreasing the supply of labour available. Skilled workers from the eastern states won't move west to live in remote locations and the new enterprise migration agreements are the only way to secure skilled labour. In general, government policies in relation to the Australian labour market have been effective in trying to reduce unemployment through the introduction of the Building Australia’s Future Workforce and The Fair Work Act. However, the global economy is still a significant factor in influencing the Australian economy through its effect on consumer spending and therefore employment.