Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer update the House on the wage price index data released today and its implications?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for his question because this is a very serious matter. The wage price index for Australia grew by 1.1 per cent in December and by 4.2 per cent over the year. As we have said, this is a very, very tight labour market, so we need to be alert to the skill shortages and labour shortages in the Australian economy, something those opposite were not alert to for 11 long years.

These are solid wage rises, but we need to ensure they are closely linked to productivity growth. As I was telling the House earlier, our industrial relations system, where wage rises will be linked to productivity growth at the firm level, is absolutely critical. It is fair, it is balanced and it is the key to our future prosperity. As the Prime Minister indicated before, so is our capacity building agenda, so is doing something about the skills crisis, so is providing some leadership when it comes to national infrastructure and so is enhancing workforce participation. They are all absolutely critical to the productivity agenda that this government has in hand.

It stands in stark contrast to the approach of the current Leader of the Opposition and the shadow Treasurer. They do not have a plan for the future. The shadow Treasurer has a plan for himself but he does not have a plan to fight inflation. Do you know what the Leader of the Opposition said in a radio interview a couple of weeks ago? He said that there was no link between inflation and interest rates. That is how economically illiterate and ignorant the Leader of the Opposition is when it comes to these basic economic facts about what we must do to tackle the inflation challenge and build prosperity for the future. The shadow Treasurer says inflation is a fairy story. It is not a fairy story for people sitting around the kitchen tables of this country who are finding it very hard to make ends meet. This government has a plan for the future. The opposition have no plan for the future at all. They just have a plan to take each other’s jobs.