[1][2] The idea for the contract was drawn up in January 1973 by Harold Wilson and Vic Feather of the TUC, in a document entitled Economic Policy and the Cost of Living.
It represented Labour's attempt at combating the rampant inflation which took hold in the early-1970s following the "Barber boom" and the 1973 oil crisis, by utilizing their close links with the trade union movement.
Cuts in public spending imposed by the IMF after 1976, left the government unable to deliver the increased social expenditure which had been promised as part of the package.
The Accord was introduced by Ralph Willis, the Minister of Employment Relations, who had made a fact-finding mission to Britain in the late-1970s.
In Willis's view, the social contract had been fairly successful, but fell apart because of what he saw as the inflexible and unrealistic 5% pay policy, he determined that similar mistakes would not be made in Australia.