The Australian thinks Reserve Bank governor Glen Stevens called for a review of industrial relations laws:
Lucky to lazy country: review IR to stop decline
RESERVE Bank governor Glenn Stevens has called for a review of Julia Gillard's industrial relations laws, warning that Australia's prosperity is making the country lazy about productivity reform.
Addressing the House of Representatives economics committee in Melbourne yesterday, Mr Stevens said he did not expect the world economy to enter a new downturn and added that the bank would hold interest rates steady until clear evidence emerged of the effect on consumer and business spending of recent turmoil on the markets.
However, he said persistent inflation at a time when much of the economy was slowing made the Reserve Bank's task more difficult. He laid the blame on rising business costs caused by weak productivity.
``We do tend when times are good not to press as hard on some of those reforms as we might,'' Mr Stevens said.
``I don't think there's any doubt that the period of maximum focus on productivity-enhancing reforms was in the period when the banana republic issues were debated,'' he added, referring to Paul Keating's years as treasurer in the 1980s.
``We felt we had to do it better and we did do it. It perhaps proves harder to do that when affluence has been better for a period of time.''
Mr Stevens said the government had a ready source of advice on what to do from the Productivity Commission. Its agenda included the efficient pricing of utilities and infrastructure, improving competition, reducing inefficient regulation and reforming zoning and planning rules.
However, pressed by Coalition and government members on the committee, Mr Stevens said the business people he spoke to believed that the government's industrial relations reforms, imposed to replace the Howard government's Work Choices regime, had reduced the flexibility of the workforce.
``They might be wrong in their assessment of the system, but I think there are people who feel that,'' Mr Stevens said. ``If they are wrong, then it would be good to get the heads together and show how the system is actually very flexible, because I think there are people whose instinct is that it has gone back the other way.
``While I do not have a silver-bullet policy to fix the problem, I can do no other than say as a public official that we should be giving careful consideration to these matters but, by all means, on as rigorous evidence as we can find.''
The Prime Minister yesterday defended her record on productivity, including dumping Work Choices. She said that rather than compete with the world on low wages and conditions, ``I put in place a plan to compete with the world on knowledge and skills . . . to unlock the real drivers of future productivity"...
Except that he didn't. He did not call for a review of Julia Gillard's industrial relations laws.
The nearest he came was when he he said:
"What businesspeople say to me — and I think this would be a theme I have heard from a number of quarters — is not so much that wages are excessive and indeed at this point in time the aggregate data on wage growth which is probably fourish, a touch under maybe, is on a par with what we have seen over the years. What people say to me, I cannot verify it obviously, from their individual businesses is that they find it harder to negotiate flexibility. That is something that is said. If that is true that I think is a matter for concern... If they are wrong, then it would be good to get the heads together and show how the system is actually very flexible, because I think there are people whose instinct is that it has gone back the other way."
A long bow.
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