All’s well with the Australian economy, as the Reserve Bank confirms by leaving the cash rate unchanged. Or at least our central bankers are not unhappy about their contribution to the economic wellbeing of Australians. Indeed, Fourth-Quarter GDP growth outstripped expectations, jumping 1% in the quarter and 2.8% for the year. This is the highest growth rate since the June Quarter 2005, and reflects an increase in non-farm GDP of 1.4%.
All’s well with the global economy it seems, despite the financial market meltdown that is still sorting itself out. This is the verdict of the global gurus, with the occasional Cassandra concerned at “subprime lending” in the USA.
We are grateful to Alan Wood for reporting that John Howard reminded us all that “It’s the economy” when talking at the Menzies Centre last week, on the same day that Shanghai shares fell by 9%.
Woodie made a powerful point that Henry has tried to make with less success. Economic policy differences boil down to one variant of the slogan already quoted — “It’s about IR policy”:
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Labor’s exposed economic policy flank is industrial relations. Its latest draft of its platform on industrial relations, reported by Brad Norington in The Weekend Australian, shows its inability to deliver the flexibility necessary to handle the inevitable global economic shock when it does come along.
In his diaries, former Opposition leader Mark Latham asks himself despairingly: “Why should federal Labor be dragged down, handcuffed to the drowning men of the union movement?” Good question, but Latham damaged his economic credibility irreparably when he embraced a pro-union industrial relations platform at the ALP’s national conference in late January 2004.
Will Rudd do the same at this year’s national conference in Sydney in April? There is no sign so far that he has an answer to Latham’s question.
We remind readers of our recent advice to Mr Rudd on precisely this question:
It seems the voters do not like the Government’s new industrial relations (IR) laws, despite Henry’s assertions that they have freed up the labour markets and helped create many more jobs.
But these reforms hold considerable economic benefits, so here is a thought for Comrade Rudd: Do not engage in Rollback — instead find a way to overlay a mechanism for assessing “fairness”. Allow anyone who has a half-reasonable case of having been unfairly dealt with to appear before a tribunal — perhaps some variant of the Fair Pay Commission — to argue his or her case.
Retired union leaders — bush lawyers to a man — could provide their services free to represent the complainants. Employers could foot their own bills, but could be represented cheaply by retired industry lobbyists. The judges would be required to adjudicate each case, taking into account the circumstances of the employer as well as the aggrieved employee.
Read more at Henry Thornton.