Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Hansard source

I thank the honourable member for Franklin for her question. Australia faces a range of economic challenges at present, challenges which come from abroad and challenges which are being generated domestically. From abroad we see corrections to growth projections across many of the developed economies in the world, coming out of in part the subprime crisis in the United States—revision downwards in growth for the American economy, those in Europe and those in Japan.

But on the domestic front we also face a serious economic challenge arising from inflationary pressures in the economy. At the time the government took office at the end of last year, inflation in this country was running at its highest rate in 16 years. It did not get there overnight. Further on the inflation front, this morning the Assistant Governor of the Reserve Bank of Australia, Malcolm Edey, highlighted the risk in a speech to the Committee for Economic Development in Australia. In that speech Mr Edey stated that for the Australian economy ‘the main domestic challenges are those of strong demand, tight capacity and inflationary pressures’. Mr Edey added the warning that the consumer price index’s annual figure ‘could spike to something close to four per cent next quarter’.

The threat of rising inflation, as I said before, has not arisen overnight. We have seen the emergence of data on rising inflationary pressures in the economy over some years now. The Reserve Bank Statement on monetary policy most recently projected ahead that this economy was in the likelihood of receiving inflation outcomes in 2008, 2009 and through to mid-2010 which would be at or above the projected Reserve Bank upper range of three per cent.

These mean that the government and the nation must act in concert in the fight against inflation. We, the government, are the first to concede that inflation cannot be controlled by all factors which lie within domestic policy. You have massive boosts to the terms of trade. That has an effect in terms of the amount of consumption which then flows around in the domestic Australian economy. Another causative factor of these inflationary pressures is what is happening with the drought in recent times.

But there are factors which are within the range of government policy, and they go to what we can do on the question of public demand, what we can do through budget policy, what we can do when it comes to boosting private savings, what we can do when it comes to inflation and what we can do when it comes to infrastructure as well as skills and participation in the economy. That is why the government has articulated a clear-cut strategy in its fight against inflation. Our five-point plan deals with, one, what do we do with the overall projection for the budget surplus; two, what do we do to boost private savings; three and four, what can we do to boost skills and infrastructure; and, five, increasing our overall workforce participation rate. This is a clear-cut plan for the future and is necessary if we are to confront the challenge of inflation.

Part of the participation challenge lies with what we do in industrial relations to ensure that we have a flexible system which is both fair for working people and flexible for employers. That is why we believe in having an industrial relations system which gets the balance right, an industrial relations system which says to working families, ‘Here is a fair outcome for working families,’ and says to employers, ‘Here are a flexible set of arrangements which enable you to build your businesses into the future,’ and overall to enhance participation in the economy and long-term productivity growth. We know on this side of the House where we stand on industrial relations. Our position on industrial relations has been rock solid throughout the year leading up to the 2007 election. Everyone knows what we stood for. We would abolish Work Choices; we would abolish AWAs.

We have not seen so far parallel parity from those opposite. In fact, what we have seen from those opposite is an evolution of positions. We had the opposition leader telling us just after the election that Work Choices was dead. Then straight afterwards they unleashed the Senate to try and give Work Choices some mouth-to-mouth resuscitation, bring it back to life and make sure that our legislation in the Senate would be frustrated to the greatest extent possible. Now we have the third iteration, the third evolution, coming out of the party room today. As of today, Tuesday, I think Work Choices is off again. I think it has gone again, but I am not altogether clear and I would like some clarification from those opposite. We have had flip, flop and flap when it comes to the whole question of Work Choices and the future of AWAs. I gather we are up to the flap stage but I am all ears to hear what the current status of Liberal Party policy is formally on Work Choices and AWAs for the future.

If the Liberal Party is returned to office in the future, and whichever group within the Liberal Party happens to have assumed dominance by that stage, where will their industrial relations policy stand at that point? I know that the Leader of the Opposition’s chief of staff is gung-ho on this stuff; he comes from ACCI. I know that a whole lot of people are gung-ho on this stuff. So, once they get the chance, as happened before the 2004 election, whatever is said before the election, we know one thing for certain: what they say before the election they will turn turtle on after the election. We have got flip, flop, flap now on Work Choices. If they return to office, the guarantee is that we will have another extreme, hardline approach to industrial relations, because the party opposite has lost its way and lost touch altogether with working families.

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