Do investment attraction incentives create decent jobs? A study of labour conditions in industry assistance contracts

8 Sep 2008

Governments at all levels in Australia offer financial assistance in one form or another to private corporations in order to encourage and facilitate business investment in their respective jurisdictions. This disbursement of public funds is often justified on the basis of the number of jobs that will be created by the assisted firm. From a labour law perspective, this rationale begs the question of whether governments seek to influence the quality of jobs to be created by corporations receiving assistance.

This paper presents findings on how three state governments in Australia (NSW, Queensland and Victoria) use industry assistance to pursue public policy goals relating to job quality and the character of employment relations in assisted corporations. It also examines how any such conditions attached to the disbursement of financial assistance are monitored and enforced. State governments remain less than forthcoming as to the details of these grants. Nonetheless, it is possible to draw a number of observations as to the extent to which industry assistance is and could be used in the three Australian states as a means through which to regulate job quality. We conclude by discussing the potential use of investment attraction to promote job quality in subsidised corporations, drawing on existing regulatory approaches in the United States.

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