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Peter Costello warns the Australian economy is not bulletproof. (File photo)

Peter Costello warns the Australian economy is not bulletproof. (File photo) (AFP)

Costello warns against economic 'L-plater'

The latest job figures have reignited the political debate over industrial relations.

The figures put the unemployment rate at a new 32-year low of 4.2 per cent, sparking concerns about inflation and pressure on interest rates.

Federal Treasurer Peter Costello says industrial relations reform has helped deliver a lot of new jobs, but warns the Australian economy is not bulletproof.

He argues any misfire on industrial relations will push up inflation and bring the boom to an end.

"This is like a highly engineered racing car and I tell you what, I wouldn't be putting an L-plate driver in the cockpit at the moment," he said.

Employment and Workplace Relations Minister Joe Hockey also says the strong jobs result would be under threat if Labor wins the election.

"We are enjoying salad days when it comes to employment in Australia, we cannot put that at risk with a return to the old industrial relations regime," he said.

Federal Opposition treasury spokesman Wayne Swan has welcomed the job figures but says they underscore the need for Australia to lift productivity.

"At the moment there's upward pressure on inflation and upward pressure on interest rates from the Government's failure to deal with the skills crisis," he said.

"[Mr Costello] wants to go out there and run a scare campaign.

"He can do that but what we actually need is a debate about what drives productivity so we can keep pressure downwards on inflation and downwards pressure on interest rates.

"In our policy, wage outcomes are determined at enterprise level, based on productivity improvements - that's the Labor system."

Mr Costello says Australia is now entrenched as a low unemployment country.

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The Prime Minister John Howard has attributed the 32-year unemployment low to the Federal Government workplace ammendments.

Audio Related Audio

The good news on the economy keeps on coming with unemployment at a 32-year low and the inflation rate well contained. But some economists say strong economic growth and a tight labour market could lead the Reserve Bank to move on interest rates before the next election.

The latest labour force figures put the unemployment rate at a new, 32-year low of just 4.2 per cent.

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