LABOR'S IR changes likely to trigger job losses and higher inflations. (1 Viewer)

[chicky_pie]

LABOR'S industrial relations changes are likely to trigger job losses and higher inflation that will ultimately create "wage-price spirals" and drive up interest rates, according to Treasury's official analysis of the plan to scrap Work Choices.

The Treasury critique, revealed in The Australian today, also finds that limiting unfair dismissal laws will cut jobs, increase red tape for small business and make it more difficult for people to move from welfare to work.

The disclosure of the highly critical economic assessment of the plan to scrap John Howard's Work Choices laws came as Wayne Swan insisted that fighting inflation and taking price pressures off working families were the Government's prime budget objectives.

However, the Federal Government has accused the Liberal Party of leaking a year-old Treasury memo in an attempt to divert attention from the inflation "legacy" left by the previous coalition government.

Employment and Workplace Relations Minister Julia Gillard said the Treasury minute lacked credibility as it was prepared before Labor's industrial relations policy was released.

"This leaked Treasury minute does not comment on Labor's workplace relations policy," Ms Gillard said in a statement to AAP.

"The minute is dated April 18, 2007 and so clearly could not analyse Labor's policy as it had not yet been released."

The Treasury minute was provided to the former treasurer Peter Costello, Ms Gillard said.

"(It) has obviously been leaked by the Liberal Party because they don't want to talk about their inflation legacy," she said.

Later, Ms Gillard said people would see through the leaking of the document.

"I think Australians will see through this," she told ABC Radio.

"Australians are a very commonsense people and they'll be saying to themselves 'Geez how does that add up'."

The Reserve Bank also warned yesterday of the danger of a wages breakout forcing interest rates higher, putting the Government on notice after Victorian teachers this week won a massive pay rise from the state Government that could trigger follow-up claims.

Treasury's assessment of the Prime Minister's industrial relations blueprint before last year's election is contained in an executive minute dated April 18, last year, which is the subject of a Freedom of Information claim.

The minute, obtained by The Australian, is a response to issues raised one day earlier by Mr Rudd in a speech to the National Press Club in Canberra, which he used to flag the industrial relations changes Labor would make in government.

The analysis, delivered to then treasurer Peter Costello, looks at Labor's key workplace reforms, including the abolition of Australian Workplace Agreements; the restoration of guaranteed penalties, overtime and holiday pay; linking wages to living standards; and changes to the unfair dismissal laws.

ABC television reported last week that Treasury had rejected part of a separate FOI request for advice about whether Labor's workplace changes would cause higher inflation. The decision came despite Labor promising more openness in government, including reform of FOI laws.

According to the secret Treasury advice, the department, under Treasury secretary Ken Henry, concluded that the abolition of AWAs and the return of guaranteed penalty rates would cut jobs, put "upward pressure on prices", create more "flow-on" wage claims from sectors such as mining to less productive sectors and allow unions to "bid wages up above their market level".

The Treasurer yesterday said he was not concerned that Labor's industrial relations changes would undermine his anti-inflationary budget "because our industrial relations policy has wage rises based on productivity".

The Government would "bring down a responsible budget", he said. "We are going to build a strong surplus to fight inflation."

Any wage rises had to be based on productivity improvements, he said.

http://www.news.com.au/business/story/0,23636,23658528-5012426,00.html

Don't blame me...I voted Liberal

 

[TacoTerrorist]

Labor says that is a load of crap concoted by the opposition and I believe them.

I'd rather have a cat's corpse as Prime Minister than that dumb old Nazi Howard; at least the corpse would resolve issues faster. Liberals have always only been interested in protecting the interests of the greedy rich and not the common Australian.

Go Labor.

 

[JaredR]

Funny how you say the Liberal Party doesn't represent the Common Australian. I know many common Australians who vote Liberal.

Home loan interest rates averaged 7.25% since March 1996 under Howard government, the lowest since the 1960s.

Real wages increased by 17.9% since March 1996.

The Liberal Government cut fuel excise by 6.7 cents per litre in July 2000 and cut again by 1.5 cents per litre in March 2001.

The unemployment rate was the lowest in 33 years under a Howard Government.

The Howard Government introduced the Baby Bonus and the First Home Owners' Grant.

 

[Trampoline Man]

Feel free to correct me if I'm wrong, but that report was apparently written up months before Labor had released its IR policy.

Home loan interest rates averaged 7.25% since March 1996 under Howard government, the lowest since the 1960s.

Did you care to look up what the average home loan was in the 1960s, or even 1990, and compare the average repayments?

Real wages increased by 17.9% since March 1996.

That's nice, but I distinctly recall pre-election we were supposed to be afriad of Labor's IR policy because it would cause a wages breakout, even though one of the selling points of Workchoices was that wages would increase

The Liberal Government cut fuel excise by 6.7 cents per litre in July 2000 and cut again by 1.5 cents per litre in March 2001.

And what good did that do? Because last time I checked, the world oil price has more than doubled since then.

The unemployment rate was the lowest in 33 years under a Howard Government.

And as no-one on either side of politics dares mention, our current level of unemployment is inflationary.

The Howard Government introduced the Baby Bonus and the First Home Owners' Grant.

So middle class welfare trumps welfare to those truly in need does it?

 

[incentivation]

Maybe so, but wait there's more.

I thought Rudd was championing open and transparent government. Something which he criticised as being non-existent under the previous government.

http://www.news.com.au/business/story/0,23636,23663846-462,00.html

The wage push came as Brendan Nelson demanded Mr Rudd release Treasury advice prepared in February showing whether his industrial relations reforms would drive up inflation.

Mr Rudd rejected the relevance of earlier Treasury advice, prepared in April last year, which criticised Labor's industrial relations policies as likely to cause wage spirals and drive up interest rates. The Australian published the leaked advice yesterday.

Mr Rudd said the leaked advice was written before Labor had released its full policy and implementation plan, which included the abolition of the Howard government's individual workplace contracts, known as Australian Workplace Agreements.

The Opposition Leader seized on the comment to demand that Mr Rudd disclose the more-recent advice, which Treasury last week refused to release in full in response to an application by ABC television under Freedom of Information laws.

"What Mr Rudd must do now is show Australians the evidence that his changes to workplace relations will not result in unemployment and higher inflation," Dr Nelson said.

"The question for us is: 'Why is he not coming clean with Australians and telling Australians that Treasury has told the Australian Government that its plan to get union bosses back into workplaces is actually going to put people out of work and push up inflation?"'

 

[Silver Persian]

Umm...so what is liberal IR policy at the moment? My impression is that the party continues to support workchoices, but recognises that the electorate doesn't, and so isn't blocking Labor IR law??

 

[Besodeiah]

Umm...so what is liberal IR policy at the moment? My impression is that the party continues to support workchoices, but recognises that the electorate doesn't, and so isn't blocking Labor IR law??

Their IR laws look a little something like this.

free teh refugeez

 

[Zrap]

Post Liberal Demolition!

 

[dieburndie]

Funny how you say the Liberal Party doesn't represent the Common Australian. I know many common Australians who vote Liberal.

Home loan interest rates averaged 7.25% since March 1996 under Howard government, the lowest since the 1960s.

Real wages increased by 17.9% since March 1996.

The Liberal Government cut fuel excise by 6.7 cents per litre in July 2000 and cut again by 1.5 cents per litre in March 2001.

The unemployment rate was the lowest in 33 years under a Howard Government.

Can you link any of these figures specifically to fiscal policy implemented by the Howard government?

The Howard Government introduced the Baby Bonus and the First Home Owners' Grant.

Two of the worst government policies of all time...

 

[chicky_pie]

Can you link any of these figures specifically to fiscal policy implemented by the Howard government?

Two of the worst government policies of all time...

No it's not, you see heaps of people are having kids today, look at all the Islanders and Arabs, 7 + children, a van and baby bonuses.

 

[chicky_pie]

Funny how you say the Liberal Party doesn't represent the Common Australian. I know many common Australians who vote Liberal.

Home loan interest rates averaged 7.25% since March 1996 under Howard government, the lowest since the 1960s.

Real wages increased by 17.9% since March 1996.

The Liberal Government cut fuel excise by 6.7 cents per litre in July 2000 and cut again by 1.5 cents per litre in March 2001.

The unemployment rate was the lowest in 33 years under a Howard Government.

The Howard Government introduced the Baby Bonus and the First Home Owners' Grant.

Don't forget Centrelink and Youth Allowance, lol.

 

[wuddie]

one child policy it is.

i reckon labor has to use the upcoming budget to tackle inflation, petrol and housing issues. the ir stuff can wait a bit, because i do actually think it will add to some sort of inflation (higher wages demanded, higher costs, inflation).

the inflation is still above 4%, the rba has got a hand on the lever every month and mortgage owners have their hearts in their mouths. it won't be christmas before we'd get interest rates of 8% i reckon.

 

[TacoTerrorist]

The Baby Bonus and First Home Buyers Grant are good policies.

 

[chicky_pie]

The Baby Bonus and First Home Buyers Grant are good policies.

I know, we're in the middle of a baby boom. :uhhuh:

AUSTRALIA is in the middle of a new baby boom, with the nation's birth rate the highest in 10 years. The nation's statistician says women can now expect to have 1.8 children during their lifetime. There were 265,900 births registered in 2006 - the highest number in 30 years - the Australian Bureau of Statistics said.

http://www.news.com.au/story/0,23599,23670786-421,00.html

<3 Liberal party.

 

[Aryanbeauty]

The Baby Bonus and First Home Buyers Grant are good policies.

Baby bonus are particularly good for people like Keysar Trad who has no other thing to do than have 9 children, live off government grants and bash Australians at every opportunity.

 

[TacoTerrorist]

^ I'm sure there are a huge amount of people doing that.

The baby bonus is helpful but I don't know why we need to increase Australia's population. There is a skills shortage so why don't we import skilled foreigners rather than having more children for the future? The workforce trend isn't going to change anytime soon, especially with Generation Y.

 

[dieburndie]

^ I'm sure there are a huge amount of people doing that.

The baby bonus is helpful but I don't know why we need to increase Australia's population. There is a skills shortage so why don't we import skilled foreigners rather than having more children for the future? The workforce trend isn't going to change anytime soon, especially with Generation Y.

You're the one saying it's a good policy.

I have no idea why.

 

[wuddie]

^ I'm sure there are a huge amount of people doing that.

The baby bonus is helpful but I don't know why we need to increase Australia's population. There is a skills shortage so why don't we import skilled foreigners rather than having more children for the future? The workforce trend isn't going to change anytime soon, especially with Generation Y.

you clearly didn't do economics for hsc.

our generation will have to pay heaps of tax to support our parents' generation because there is less of us and more of them. by the time the baby boomers retire, their health care won't be as good as today's. why? national revenue (taxation being the major contributor) will decrease and less of the money will go to more people. do you see the problem?

if the trend is the other way around ie more children, less parents, then by the time the parents retire, they can enjoy a better life and there is less stress on the children's tax burden. so the idea is we try to keep this trend - always have more children than parents. hope that sorta explains it.

 

[banco55]

That's nice, but I distinctly recall pre-election we were supposed to be afriad of Labor's IR policy because it would cause a wages breakout, even though one of the selling points of Workchoices was that wages would increase

In a deregulated labour market wage rises are more likely to be linked to productivity gains (and thus not be as inflationary as union driven wage breakouts). I don't think one of the selling points for workchoices was that wages would increase. The Government was not good at selling workchoices (one of the main problems is the average Australian knows fuck all about economics so all the Government's arguments were dumbed down and read between the lines stuff).

The Liberal party could never bring themselves to say plainly that they preferred an economy with higher levels of growth, lower levels of unemployment and lower wages for unskilled workers versus slower growth, slightly higher wages for unskilled workers and higher unemployment.

 

[jb_nc]

In a deregulated labour market wage rises are more likely to be linked to productivity gains (and thus not be as inflationary as union driven wage breakouts). I don't think one of the selling points for workchoices was that wages would increase. The Government was not good at selling workchoices (one of the main problems is the average Australian knows fuck all about economics so all the Government's arguments were dumbed down and read between the lines stuff).

The Liberal party could never bring themselves to say plainly that they preferred an economy with higher levels of growth, lower levels of unemployment and lower wages for unskilled workers versus slower growth, slightly higher wages for unskilled workers and higher unemployment.

In a deregulated labour market, unions could strike whenever the fuck they want for whatever reason they want.