The most important reserve bank governor for Australia?

We have essentially gone back to the creaky and combative industrial relations environment of the 70s.

The union movement is quite conscious of this with Australian Council of Trade Unions (ACTU) Secretary Sally McManus recently quoted saying that wages aren't a problem because our system isn't like it was in the 80s.

In fact, the 80s was when the system was reformed under Labor, following on from the wages break-out of 1982 when deregulation of the wages system, combined with pattern bargaining in the mining industry, pushed wages up in anticipation of benefits that never came.

She must know better. This is a deliberate deflection from the decade we do resemble - the one before.

Bullock has her work cut out

So Ms. Bullock must look like a headache to the treasurer. Rates to stay up for longer and not fall as far, and a double-helping of that if he doesn't do something about productivity.

She also makes some comments about anticipation being a factor in inflation. This could be aimed at the government's habit of compensating voters for increases in the cost of living.

When they top-up incomes to pay for inflation they dull the effect of RBA monetary policy. The point of high-interest rates is to hurt consumers and businesses, and cause them to reassess their spending plans.

If there is no hurt, then inflation will stay up, and so will interest rates.

But why was Ms. Bullock soft on wages when she is happy to speak the truth on other matters?

The answer to that might lie in the fact that while we tend to treat the RBA governor like Moses, delivering the tablets from the mountain, in fact, it's the work of the committee, and that committee is undergoing not-so-subtle change to make it more friendly to the government.

There have been two new outside appointments to the board under this government-Iain Ross and Elana Rubin. It doesn't show on their RBA entries, but both have ACTU backgrounds.

Further to that, Mr. Ross was the president of the Fair Work Commission who last year agreed to increase the minimum wage by 8.6 percent absent any improvement in productivity.