Mr FAWCETT (2:28 PM) —My question is addressed to the Treasurer. Has the Treasurer seen recent comments on the risks of rolling back industrial relations reform? Would the Treasurer explain what the effect of this rollback would be on the small businesses, individuals and families in Wakefield due to its impact on the economy and interest rates?

Mr COSTELLO (Treasurer) —I thank the honourable member for Wakefield for his question. At the moment the Australian economy is strong. It is strong because we have more Australians in work than ever before. We have unemployment at a 33-year low. We have GDP higher than it has ever been before. We have real wages which have increased some 20 per cent. In these circumstances, where we are as close to full employment as we have been in 33 years, you do tend to get price pressures in the economy.

The task of managing the economy from this point forward is going to be the task of managing a strong economy and keeping inflation in check. Absolutely critical to that great task over the years which lie ahead is industrial relations policy. Let me quote Ian Macfarlane, the former Governor of the Reserve Bank, in August 2006. He said:

The governor of the bank was saying that where you have parts of the economy which are hot, either because there is profitability or because there is labour shortage, if you do not have a deregulated labour market those hotspots move right across the economy and they put pressure on inflation. As was always the case in Australia, the boom leads to a bust. Because this government has put in place Work Choices with Australian workplace agreements—because this government has improved industrial relations—those hotspots do not move their way across the economy and push out inflation, and as a consequence we are not being subjected to the same bust as we normally would have at this period of the cycle.

There would be nothing more damaging to the Australian economy than to turn our back now on industrial relations reform and to roll back to the way in which we were let down in this country in the years gone by. This is where Labor is a complete throwback. Labor is wanting to throw back not just to the industrial relations system of 2000, or even to the industrial relations system of 1997; Labor wants to throw back pre-1993. It wants to go back to pattern bargaining, awards, the abolition of AWAs and centralised wage fixation. Nothing could be more damaging to where the Australian economy is at the moment than to have that throwback from the Australian Labor Party.

The Leader of the Opposition has a wonderful capacity to get economic policy wrong. You will recall, Mr Speaker, that when we reformed the tax system the Leader of the Opposition said it was fundamental injustice—the great day in 100 years where fairness in the Australian nation ended. Always one for pompous rhetoric, the Leader of the Opposition, when this government reformed industrial relations, had this to say. This is when we reformed the industrial relations system which, since it was reformed, has led to 390,000 new jobs. This is what the Leader of the Opposition said in the parliament:

Three hundred and ninety thousand new jobs later, I do not think many Australians are looking back to November 2005 with a fondness and demanding we return there, just as there are not many Australians wanting to go back pre-2000 to the old wholesale sales tax, the state taxes and higher income taxes. The thing about the Leader of the Opposition is that he has been persistently wrong on economic policy. He has always made pompous rhetorical boasts. He has no part in taking any credit for the modern Australian economy. If it had been left up to him, it would never have occurred. And, if it is left up to him, the objectives that we have in the years to come will never be achieved.