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Abstract

In this paper we show that reducing industry protection in Australia is likely to increase the average real disposable income of the household sector. The relative winners and losers of tariff reform would depend upon the specific outcome of the wage fixation processes. This is because the level of the real wage rate is an important determinant of the level of economic activity in the economy, and hence, of the real incomes accruing to 'various factors, including labour. The analysis depends on simulations using an extended version of the ORANI model of the Australian economy. That is. the 'standard' version of the ORANI model has been augmented with data from the 1981-82 Income and Housing Survey.

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