Complementarity of market and state intervention in the context of Australia’s structural reforms since the early 1980s

The ongoing debate concerning the role of state vis‐á‐vis market has prompted some scholars in Australia to reassess this simple dichotomy. Recently, they are urging neoliberal policy makers to follow a “middle way” avoiding the extremes of the free market approach and the traditional interventionist/planning approach. This paper examines the reasons why extreme approaches to policy making are inferior from the broader socio‐economic point of view. In order to highlight the state‐market complementarity, it focuses on the range of policy tools that have been commonly employed in Australia in recent years, and then shows how they have assisted the market to operate more efficiently by providing economic and social infrastructure, and achieved non‐market oriented social‐justice objectives through re‐distribution measures.