Alan Ferguson (SA, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Leader of the Government in the Senate and Minister for Finance and Administration, Senator Minchin, representing the Prime Minister. Is the minister aware of any recent estimates of the economic benefits of workplace reform? If he is, what do they tell us about the likely economic consequences of winding back the government’s recent workplace reforms?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I thank very much my South Australian colleague in the Senate Senator Ferguson for his question. I point out that for a long time now the opposition leader and shadow Treasurer have been saying that the Labor Party economic policy is exactly the same as the government’s—not a sliver of light between them. Of course, we are flattered by this comparison. I think it is an acknowledgement that the Australian economy is very strong—16 years of continuous growth, unemployment at record lows, real wages rising and low inflation.

But Labor’s problem, of course, is that it cannot claim to have the same policy as the government and at the same time find fault with individual aspects of the economics of the country, especially given the focus which the Labor Party puts on things such as high house prices and skills shortages, which are a product of a very strong economy. You cannot claim to have the same economic policies as the coalition when you have opposed every single economic reform that we have put to the parliament. You cannot simultaneously claim to have the same economic policy as the government while you have the ACTU’s industrial relations policy.

The Labor Party does not seem to understand that workplace policy is an arm of economic policy. If you embrace the ACTU position then the Labor Party, by definition, wants to take us way back to the pre-Keating era of centralised union dominated pattern bargaining, inflexible one-size-fits-all rules applied across the economy and the disastrous reintroduction of unfair dismissal laws at the level of small business. Whether or not Labor like it, the ACTU policy, which they have pledged to introduce, is an economic policy and a very bad policy for this country.

Last Friday the respected and independent economic analyst Econtech released an assessment of the impact on the Australian economy by returning to a pre-Keating system of industrial relations, as the Labor Party proposes. Econtech found that, by 2011, just four years from now, real GDP would be 4.8 per cent lower because the economy would grow at only about half the rate that it is growing under existing policy. In four years time, every Australian would be an average of $2,700 a year poorer than they would be under a continuation of current policy. There would be $11 billion less in business investment—

Opposition Senators:

Opposition senators interjecting—

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

They do not like to hear this, of course, as you can tell by the interruptions. There would be 316,000 fewer jobs, resulting in a rise in unemployment, and there would be inflation, hitting an annual rate of five per cent by 2009. This would force interest rates higher, by some 1.4 percentage points above the levels under existing policy. In other words, interest rates would be higher under the Labor Party than they are under us. A household with a mortgage of $300,000 would be paying $273 a month more in repayments under Labor. Real wages would be $787 a year lower under the policy of the Labor Party than they would be under a continuation of our policy.

This is the real hip-pocket impact of Labor’s ACTU workplace relations policy. Australian families clearly would face lower wages, higher unemployment, higher inflation and higher interest rates. And that should not come as any surprise because we have seen it all before. This is exactly what happened when we had the pre-Keating industrial relations policy under the Labor Party. We had real wages not growing at all, inflation averaging five per cent, unemployment peaking at 10 per cent and interest rates at 17 per cent. So we have seen from real experience what Labor’s policy would be like. Econtech simply reasserts that that is what will happen if Labor get back in and the Greens allow them to introduce this terrible policy. It shows that you cannot go on pretending that you have the same economic policy as us when your ACTU-inspired workplace relations policy will cause so much damage to the Australian economy.