How will Labor’s IR Rollback damage the economy? It seems both the headline changes discussed yesterday and the fine print that emerges in today’s dissection provide safeguards and allow there to be justice in Julia Gillard’s claim that Labor’s policies hit “dead centre” in the IR debate.

Consider some headline from The Oz today: Brad Norington: “Scare campaign a red herring”; Mike Steketee: “The sky is not falling”; Editorial: “Bored of comfort: Howard’s dilemma”; and, best news of all for Labor “BHP can live with Labor’s blueprint”.

We shall await a more learned exposition from an active economist, but for now it looks as if Labor’s rollback has defused the best (or worst, depending on one’s perspective) elements of the Coalition’s scare campaign. Drat – I quite enjoy the ad where the union heavies come into a frock shop and turn off the lights. More likely looking for a bargain now.

“Construction work down fell 1.9% in the June quarter (+3.0% y-o-y)” reports the good folk at St George. “This was weaker than market expectations, which had centred on a 2.0% increase”. It seems this is a sign that growth in the June quarter will be slower than March’s stellar performance.

Together with the market turmoil, the consensus is that the Reserve will have sufficient reason to sit on its hands following the meeting of its board in early October. Stay tuned.

Iran

“US warns Iran of nuclear holocaust” is a scary headline. The possibility that President Bush will nuke Tehran should scare us all. But this story refuses to go away, as some influential analysis says the (admittedly high) costs of trying to wipe ot Iran’s nuclear capacity are less than the costs of doing nothing and letting Iran fill the power vacuum in the Middle East.

The Economist published a special report on this issue back in July, well worth a read for those who like to worry at night.

Read more at  Henry Thornton