KEY POINTS:
CANBERRA - Former prime minister Paul Keating has blasted the coalition government's claims to have managed the economy well, saying all it has had to do is run a budget surplus each year.
The essential structural changes to the economy, such as floating the exchange rate, introducing enterprise bargaining and lowering tariffs were all done by Labor governments in the 1980s, he said.
Mr Keating's comments come as the economy has received good news this week with unemployment down to 4.2 per cent, gross domestic product jumping by 1.6 per cent and the dollar reaching above 84US cents.
"With this great burst of income, the dollar is doing its usual shock-absorber job and going right up to take the income surge out of the economy," Mr Keating said.
"Getting these terms of trade is like getting a vodka shot -- the old body jumps, and the economy jumps.
"To stop the jump, the dollar's gone up to lower the A$ proceeds.
"That's got nothing to do with Peter Costello and everything to do with Labor's structural changes from the '80s."
Mr Keating said containing inflation was now all about those structural changes achieved in the 1980s.
"There's the exchange rate taking the shocks, there's tariffs letting the deflation (through) and there's enterprise bargaining giving within-sector flexibility and keeping inflation low."
Mr Keating said it was the very sound shape of the economy that made voters think it could be a good time to change government.
"When things are good in the economy, people think they can be a little more footloose in changing governments without getting hurt in the crossfire," he said.
"I do think that is in the mind of the community now."
- AAP
