Economic backflip wouldn't happen under Labor, says Gillard

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Economic backflip wouldn't happen under Labor, says Gillard

Federal Government claims that Labor's IR policies would take Australia's economy back to the days before 1993 have been met with derision by the Opposition, which says its proposed reforms have elements that Labor has 'never before contemplated'.

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Federal Government claims that Labor's IR policies would take Australia's economy back to the days before 1993 have been met with derision by the Opposition, which says its proposed reforms have elements that Labor has 'never before contemplated'.

Federal IR Minister, Joe Hockey, made the claims last week, based on an independent economic study released by Econtech, which suggested abolishing the workplace reforms since 1993 would make a person on average wages with an average mortgage $4,063 worse off per year (comprising a $787 cut to real wages after tax and a $3,276 increase in mortgage repayments).

The report also found that by 2011:

  • GDP will be $57bn or 4.8% lower, which is equivalent to $2,700 per person
  • business investment will be $11bn lower, a fall of 5.%
  • employment will be cut by 2.9%, with 316,000 jobs lost
  • the cost of living (CPI) will be 1.3 percentage points higher, and
  • due to the higher rate of inflation, interest rates will be 1.4% higher by 2011, with repayments on the average mortgage $273 higher per month

Proof reforms are working, say employers

ACCI CEO, Peter Hendy, said the research underscores the business campaign calling for the retention of all workplace reforms since 1993.

'Workplace reform was started by the Keating Labor Government in 1993 when enterprise bargaining was first established. It was built on by the Howard Government in 1996 and again in 2006,' he said. 'This research clearly shows that winding back workplace reform will cost the country and ultimately working families and our future generations.'

Claims untrue

However, Labor IR spokeswoman, Julia Gillard, said Howard and Hockey have seized on the report and tried to characterise it as what would happen under Labor.

'The claims by the Government are simply untrue and should be rejected out of hand,' she said. 'There is no part of Labor's industrial relations policy that is about going back.

'It's about having a system in this country that is balanced, that balances up the interests of employers and employees.

'Labor's new system will have in it elements that Labor has never before contemplated but we believe are important for the modern economy now.

'Specifically, we will have a uniform system for the private sector. That is a ground breaking reform. No one has every tried to do it in this country and Mr. Howard is completely unable to achieve this reform which would be of benefit to business.

'Labor's system would be tough on industrial action and we would require mandatory secret ballots before industrial action is taken and there would be no strike pay; it would be unlawful to pay strike pay.'

Where are the numbers?

Gillard challenged the Federal Government to genuinely contest the economic benefits of IR systems in Australia.

She queried why Prime Minister John Howard has he never released any economic modelling about the 'so-called benefits of WorkChoices'.

'He talks about the so-called benefits of his extreme industrial relations laws, but he has never released any economic modelling to prove the benefits of those laws and that's because he can't prove the benefits of those laws as claimed by him,' she said. 'Why is it that since WorkChoices in this country, we have seen productivity continue at a low level, we have seen employment growth but at lower rates than the period before WorkChoices and most startlingly of all we have seen four consecutive interest rate increases since WorkChoices was introduced?

'There is a better way for this country; there is a better way for this county's economy. There is a better way for the working families who do the right thing at work every day and that's the system that Labor is proposing which is all about a system for Australia's future.'

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