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Costello claims Labor reforms as his own.

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WAYNE SWAN MP Federal Labor Shadow Treasurer


Peter Costello has broken his own record for self-congratulation today, trying to pass off the benefits of previous Labor government reforms as his own.

Mr Costello today claimed that his Work Choices laws are responsible for the economy's ability to absorb the impacts of the present terms of trade boom.

But even the Secretary of his own department Dr Ken Henry has exposed the dishonesty of Mr Costello’s claims.

Dr Henry has repeatedly confirmed that it is the major reforms of the last Labor Government that have underpinned the stability of our economy in the face of the terms of trade boom.

Labor's reforms wholly transformed our economy. We floated the currency and removed capital controls; brought down the tarriff walls; shifted from centralised wage arbitration to a wholly new system of enterprise bargaining; and introduced competition policy. These reforms opened our economy to the world and made us vastly more flexible and resilient.

Mr Costello is quick to claim credit, but he neglects to mention that he actually voted against Labor’s shift to enterprise bargaining.

The fact is, since Labor's reforms we have not seen wages and inflation break out as they did when John Howard presided over both double-digit inflation and double-digit interest rates, peaking at 22 per cent in 1982.

Although at least Mr Costello has acknowledged this economic nadir, attacking Mr Howard as a failure on inflation and interest rates as Treasurer in the Howard biography.

Contrary to Mr Costello's desperate scare campaign, Labor's industrial relations system will guard against wage inflation.

Labor’s system will be underpinned by workplace level enterprise bargaining where employees and employers bargain over employment conditions and productivity improvements relevant to their own workplace.

That means changes in wage conditions in one firm will not automatically spill over to affect the wage conditions in other firms.

With four rate rises under his belt since Work Choices began, Mr Costello scare campaign - not to mention his economic credibility - is looking very fragile indeed.

27 September 2007 Contact: Matthew Coghlan 0415098050