Both global and domestic economic growth remained robust in 2007 resulting in historically low unemployment and high labour force participation in Australia. However, these favourable labour force statistics were overshadowed for much of the year by a number of other issues such as the continuing drought, high oil and petrol prices and associated inflation and interest rate pressures, a November federal election, and the first full year of the operation of the Work Choices legislation. This article will address each of these issues by presenting an analysis of the macroeconomy and labour market, and reviewing the labour market implications of the Work Choices legislation in Australia.