The term "settlement" refers to the way this constellation of policies emerged as a compromise between major interests in Australian society at that time, namely workers and employers.
This was supported and promoted in the Colony of Victoria by a protective tariff that had been introduced in 1866 to help generate local employment for migrants initially attracted to the gold fields.
In addition, the Court of Conciliation and Arbitration brought down its "living wage" determination requiring employers to pay their workers enough to support a man and his wife and three children.
For theorist Francis Castles, implementation of these policies constituted an economic development strategy of "domestic defence" – using Australia's natural wealth to support an otherwise uncompetitive manufacturing sector, providing a good living to workers and pensions for later life.
Weaknesses in Australia's commodity exporting economy combined with steadily increasing competition in world manufacturing thanks to the newly industrialized countries (NICs) put that strategy under great pressure in the 1980s.