Union heads pressure Albanese to push again for wages to match inflation

Sydney Morning Herald, 16 February 2023

Three major union heads and the secretary of a state trades hall are calling on Labor to renew support to increase the wages of Australia’s lowest earners at least in line with inflation in the face of soaring living costs.

United Workers’ Union national secretary Tim Kennedy, Rail, Tram, and Bus Union head Mark Diamond and Health Services Union national president Gerard Hayes called for the government to support an increase in line with the consumer price index ahead of this year’s national minimum wage case decided by the Fair Work Commission.

We also have to ask, after years of wage stagnation while company profits soared, is CPI enough? We don’t think it is,” Kennedy said.

The calls have been branded “delusional” by the head of the Australian Chamber of Commerce and Industry, whose submission to the industrial umpire’s annual wage review will also be crucial to its decision.
During last year’s election campaign, Anthony Albanese said he “absolutely” supported a pay rise for minimum wage earners at the rate of headline inflation, which at the time was 5.1 per cent.

The Fair Work Commission’s decision to award workers a 5.2 per cent rise in July – resulting in a $1.05 increase to the minimum wage, now at $21.38 an hour – represented a political win for Labor.

Wages are forecast by the Reserve Bank to climb to 4.1 per cent in June, with inflation currently at 7.8 per cent and forecast to fall to 6.7 per cent by June.

Fronting a parliamentary committee on Wednesday, Reserve Bank governor Dr Philip Lowe said there was a risk workers would demand pay rises to match inflation, but he said he saw no evidence of that occurring.

“If we end up in the world ... where people link wage increases one-for-one with inflation, inflation will persist. And it’ll be more difficult. But at the moment, that’s not happening,” Lowe said.

Australian Council of Trade Unions head Sally McManus said the council hadn’t formulated its position on this year’s minimum wage decision yet, citing the uncertain trajectory of inflation.

“We will be expecting that the government will support a decent minimum wage rise and that they absolutely have to consider maintaining real wages,” McManus said.

She said the movement didn’t accept a one-off wage rise for the lowest paid would harm the economy, “but we’ve got to be mindful, you know, where do we strike this?”
“We know that things are at a delicate point in terms of where the economy might go, so we’ll be very mindful of that,” she said.

Diamond said the RTBU supported an increase to the minimum wage in line with CPI, “and we would encourage the federal government to make a submission to the Fair Work Commission to this end”.

Jacqueline King, head of the Queensland Council of Unions, said she also expected the government to back an increase in line with inflation, adding Fair Work would now have to consider gender equality and job security as objects of workplace law in deciding the new minimum wage.

Andrew McKellar, ACCI chief executive, said a wage rise in line with inflation “would be utterly delusional.”

“We have to get on top of inflation, we can’t fuel the fire. Inflation must be brought back to a realistic level in line with the target band, back to 2 to 3 per cent, and we’ve got to get productivity going,” he said.

Workplace Relations Minister Tony Burke recently said the government’s position on the annual wage review would be decided by cabinet.

“Part of us going through due process is that we make a collegiate decision. Obviously, no one ever wants anyone’s wages to go backwards,” he said.