I previously mentioned that the IR reforms would be a very bad thing for the australian economy once we're past the short term labour shortage and we hit an economic downturn. Maybe this isn't so?

Think about it; the thing that will drive inflation further and deepen an oil/interest rate based recession will be inflation. The best way to curb inflation is to take money out of the economy. The IR reforms may just present the solution to that problem. This may sound horrible but a decrease in living conditions and spending in the short run of the recession caused by employees inability to negotiate better pay may be precisely what the doctor ordered to reduce the inflation that caused it - less disposeable income means less spending and money and less inflation. This would present a situation where we would have the opportunity to get over a recession more quickly, however the costs would be huge - large increases in the number of Australians living below the poverty line and all the socio-economic side effects that go with it.

This is just a thought, in reality I cannot forsee many situations in which the benefits would outweigh the costs; but it is an idea, nothing more nothing less.

Don't fear your politicians taking this tack in a recession - it's political suicide with questionable ethics thrown in for good measure. But in reality one must know the costs and benefits of all options