Henry Thornton says Industrial Relations is Labor’s “achilles heel” and the RBA’s neutral interest rate position that left the official cash rate at 7.25% may not be the end of the trend to higher rates.  According to Henry Thornton, the pressure to increase interest rates will be driven by:-

• Wages — the chief economic problem facing Australia today
• IR policy — the Rudd Government’s softened framework is incapable of suppressing a wage-price spiral.

Gary Morgan says:-

“Work Choices” type legislation and a less regulated labour market is the only way pressure can be taken off a wages “blow out” that would lead the RBA to further lift interest rates.”

 “As mentioned many times, there is a large number of underemployed and unemployed peeople — the Government’s first priority must be to help these people to join the workforce at a fair wage — SIMPLE.”

For further information:

Gary Morgan:              Office +61 3 9224 5213   Mobile +61 411 129 094

Michele Levine:           Office +61 3 9224 5215   Mobile +61 411 129 093

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