Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Treasurer. Is the Treasurer aware of new empirical research undertaken by the OECD in its newly released 2006 Employment Outlook that finds:

No significant direct impact of the level of the minimum wage on unemployment is identified.

And:

The minimum wage could encourage higher participation by helping to make work pay for the low skilled.

Treasurer, don’t these new findings from the OECD severely undermine the economic case for the government’s objective to lower minimum wages through the Fair Pay Commission?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

No, of course they do not. And anybody who had any familiarity with the OECD would know that since 1994, when it introduced its job strategy, one of the things that it has been consistently advising developed economies to do is to remove barriers in their labour markets. One of the things that it has been consistently advising the Europeans in particular to do is to get rid of strong employment protection legislation—what we call ‘unfair dismissal’ laws—because unfair dismissal laws are a hamper on job creation. In fact, if the honourable member had listened to my answer yesterday, I actually read out—

Opposition Members:

Opposition members interjecting—

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I know; it is funny, isn’t it, that he would listen to anything. If only he had listened to the answer yesterday he would have heard me read out the very survey to which he refers. I read this quote:

The link between the standards of employment protection legislation and aggregate unemployment is uncertain in theory and, in practice, highly dependent on specific national context. However, there is evidence that too strict legislation will hamper labour mobility, reduce the dynamic efficiency of the economy and restrain job creation.

I repeat, ‘There is evidence that too strict legislation will hamper labour mobility, reduce the dynamic efficiency of the economy and restrain job creation.’ That is precisely what the OECD said. If you want further reassurance on the point, let us go to the IMF. The IMF has repeatedly said that Australia’s industrial relations laws will enhance job creation and improve the economy. The IMF was so supportive of this government’s reform that—get a load of this—the ACTU despatched a delegation to Washington to complain. Sharan Burrow went across to warn the IMF.

Kim Beazley (Brand, Australian Labor Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I raise a point of order on relevance. Maybe his ears were ringing with Alan Jones this morning, but the question was about the minimum wage.

David Hawker (Speaker) Share this | Link to this | Hansard source

The leader will resume his seat—I will rule on it. The member for Lilley asked a question which referred to a report and I believe the Treasurer is using that report.

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

In IMF article 4, this is what the IMF said:

There is now an exceptional opportunity to implement further reforms to sustain and improve Australia’s strong economic performance. In particular ... by implementing proposed reforms of labour markets ...

Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. I didn’t mention the IMF, Mr Speaker; I mentioned the OECD. Why don’t you answer the question?

David Hawker (Speaker) Share this | Link to this | Hansard source

The Treasurer is responding to the question. The Treasurer is in order.

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I have been asked about the connection between industrial relations reform and economic growth and wage growth. That was the IMF’s report in September 2000. The ACTU was so upset that Sharan Burrow went to Washington to complain to the IMF that the IMF was supporting labour market reform in Australia. ‘We warn the Tsar!’—Sharan Burrow warns the IMF. The IMF not only dismissed her complaints but issued a new report redoubling the advice on the Australian economy. I will finish up by reading from the World Economic Outlook

Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. It was a question about the OECD. It had nothing to do with Sharan Burrow.

David Hawker (Speaker) Share this | Link to this | Hansard source

The member for Lilley will resume his seat. The Treasurer is answering the question.

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

The World Economic Outlook of April 2006 says this: ‘In Australia, recent reforms to the industrial relations system and changes to tax and benefits systems will improve work incentives and should set the stage for strong employment growth.’ So, you have the IMF, the World Economic Outlook and the OECD—experience all around the world—and, on the other side of the argument, you have the member for Lilley.

Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Swan interjecting

David Hawker (Speaker) Share this | Link to this | Hansard source

The member for Lilley is warned!

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I have got to say: the member for Lilley and Sharan Burrow versus the OECD, the IMF and the World Economic Outlooknot a close race, Mr Speaker.