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

As the honourable member would be aware, in the government’s budget forecast we projected that the unemployment rate in Australia would rise to 4.75 per cent in 2008-09. We understand that many businesses across Australia are doing it tough and that is why the government believes it is important to prosecute a strategy of responsible economic management. We intend to do that, because one of the greatest obstacles which businesses face across the country is access to affordable credit. If you look at the challenges which many businesses have had in securing not just lines of credit but also affordable credit, it has been a real challenge out there, as it has been for Australian households. That is why, if you have been operating as a business with lines of credit and you have faced real challenges with 10 interest rate rises in a row on the part of the monetary policy settings of Australia during the period when those opposite were in office, the cumulative effect of that in terms of your interest rate bill is very significant indeed. Therefore, the most responsible course of action that governments can take through fiscal policy is to make sure that you are lining up your fiscal policy direction with your monetary policy direction so that you create an environment whereby the Reserve Bank of Australia has an easier time when it comes to bringing down interest rates. That is what this government has been doing. We stand by the responsible economic management approach which we adopted through the budget—anchored in a $22 billion budget surplus—and its organising principle, in large measure, was to put downward pressure on inflation and downward pressure on interest rates.

I say to the honourable member, in relation to both businesses in his electorate and businesses operating in all electorates across the country, that one of the core responsibilities we as a government have in pursuing budget policy is to make sure that we provide maximum room for the Reserve Bank of Australia to bring interest rates down. That is what we have sought to do through the budget. This is, however, simply the first step. We have an important series of economic policy decisions which lie ahead, but the overriding discipline is to make sure that the businesses in Australia have the best possible set of arrangements when it comes to their credit facilities with their financial institutions and what they are charged by way of interest rates.

The second thing I say to the honourable member is this: when any employee is faced with the challenge of unemployment or redundancy, one of the key questions they ask is, ‘What are the industrial relations conditions under which I am employed?’ I am not familiar with those circumstances which pertain to the businesses which the honourable member refers to, but can I say to the honourable member that one of the things which were part and parcel of the industrial relations system which he supported in the parliament when he was on this side of the chamber was Work Choices, and one of the features of Work Choices was an ability for employers to strip out redundancy arrangements without a cent of compensation.

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