Swan stands by surplus promise, as Coalition flags changes in IR

The Coalition has shed further light on details of the policies it will take to the next election, with commitments to deliver a first-year surplus, change industrial relations laws, hold a Productivity Commission inquiry into sectors hurt by the mining boom and make payments to states that lift housing supply.

In a speech yesterday, shadow Treasury spokesperson Joe Hockey said it was “becoming clear that the Government’s changes to industrial relations have made the system less flexible and more bound by regulation.”

“It also appears increased union power is again leading to increased levels of industrial disputation,” he said.

Hockey also called for “well-targeted spending on infrastructure” and took a tougher line on industry assistance, telling a Sydney audience “we should not, however, be in the business of propping up industries that for many reasons do not have a sustainable future in Australia.”

The comments come as weaker-than-expected growth figures cast doubts on the Government’s promise to return the budget to surplus in 2012-13, and raised expectations the Reserve Bank would cut rates again.

Official figures released yesterday showed that the economic growth rate halved to 0.4% in the December quarter. National account figures showed that company tax revenue for the December half was $32 million, a decline on the previous year.

The Australian Chamber of Commerce and Industry says a decline in labour market conditions should give the central bank food for thought. The RBA has kept rates on hold at its first two meetings of 2012, following on from two rate cuts in late 2011.

“A rising unemployment rate in the context of below trend growth and well-contained inflation would indicate that monetary policy is too restrictive for the tepid growth being experienced outside of the mining industry,” the ACCI said.

“While GDP growth was considerably slower than market expectations it will come as less of a surprise to mainstream business operators who continue to endure soft trading conditions across a range of industries and especially in areas that are dealing with significant adjustment pressures.”

Speaking yesterday, Federal Treasurer Wayne Swan repeated that Labor sought to return the budget to surplus, and described the growth figures as “solid.”

“There is no doubt there will have to be significant savings,” Swan said.

“Revenue will be depressed by the higher dollar and the impact on business and consumer confidence by the events in Europe.”