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Policy failure led to loss

By Mikayla Novak - posted Tuesday, 19 November 2013


Under the sprawling Fair Work bureaucracy, including a Fair Work Commission with significant arbitral powers, decisions such as rising minimum wages, elaborate penalty rates, and recent hikes in economy - wide regulated wages for apprentices threaten the capacity of young people and the unskilled to attain secure employment.

Unemployment had risen in trend terms over the life of the Rudd and Gillard governments, remaining consistently at about one percentage point higher than under the predecessor WorkChoices regulations.

While many factors inform unemployment outcomes, there seems little doubt that implementation of a centralised workplace relations system, which has fuelled rising labour costs in recent years, would be one of these.

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Fiscal mismanagement

One of the more enduring policy failings during the Rudd-Gillard government was its deliberate destruction of Australia 's sound public financial management settings, and its repeated, but tragi - comically unfulfilled, promises to return the federal budget to surplus.

Deeming discretionary interest rate reductions, exchange rate depreciation and automatic fiscal stabilisers as insufficient to rescue Australia from widely - held pronouncements of economic doom during the 2008-09 global financial crisis, the Rudd government plunged the budget into deficit and became a global frontrunner in the race to rack up public debt.

Rather than saving the economic structure of Australia, the stimulus package distorted our economic structure by prioritising political objectives, such as the desire to tide over unionised construction workers for several months, in some cases years, by refurbishing or constructing primary and secondary school buildings, over private sector priorities.

As is well known, some of the stimulus programs were also implemented at a heavy human cost, such as the tragic home insulation program originally proposed by Bob Brown and the Greens.

Leaving behind a budget deficit of some $30 billion, and gross public sector debts perilously close to the $300 billion mark, the former government has left behind a legacy of fiscal imprudence and waste which is likely to take many years to resolve.

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National Broadband Network (NBN)

With much fanfare prior to the 2007 election, Kevin Rudd proposed a NBN providing high-speed broadband internet services, at a cost to the Australian federal taxpayer of about $5 billion by 2013.

Originally intended to be undertaken in partnership with the private sector, in early 2009 the government announced it would itself spend up to $43 billion replacing Telstra copper wire infrastructure with fibre optic cabling.

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About the Author

Mikayla Novak is a Research Fellow with the Institute of Public Affairs. She has previously worked for Commonwealth and State public sector agencies, including the Commonwealth Treasury and Productivity Commission. Mikayla was also previously advisor to the Queensland Chamber of Commerce and Industry. Her opinion pieces have been published in The Australian, Australian Financial Review, The Age, and The Courier-Mail, on issues ranging from state public finances to social services reform.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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