Union denies RBA wage threat
ACTU Secretary Sally McManus says the Reserve Bank is in “boomer fantasy land”.
Last week, the Fair Work Commission lifted the minimum wage by 5.2 per cent, to $21.38 an hour, and workers on award rates will go up 4.6 per cent. The change is expected to affect more than 2.7 million workers.
But the RBA has put forth the view that workers might need to take a real wage cut to prevent high inflation.
RBA governor Dr Philip Lowe has warned pay rises above 3.5 per cent, which is half the 7 per cent inflation forecast by the end of the year, could force the RBA to raise interest rates and prolong high inflation.
“Three-and-a-half per cent is kind of the anchoring point that I want people to keep in mind,” Dr Lowe said in a speech this week.
ACTU Secretary Sally McManus says Dr Lowe has changed his tune.
“He was the one who said that so long as wages keep up with inflation and productivity, they're not inflationary,” she told reporters.
“I know that [RBA] board doesn't have anyone there who participates in negotiations for wages or the wage-setting system from the workers side.
“And that’s a pretty big problem if you’re, you know, making assumptions or trying to understand trying to analyse how things work.
“We're not achieving 3.5 per cent, let alone 5 per cent, let alone 7 per cent. And so to think somehow that the system is going to deliver across-the-board pay increases of 5 or 7 per cent is boomer fantasy land,” she said.
Ms McManus said warnings of a wage-price spiral are frequently used by employers to deny pay increases.
“Nurses and teachers will be pushing to make sure this year that their wages don't go backwards, their wages have gone backwards for years now,” she said.
“Even the Reserve Bank governor is saying; ‘It's fair enough this year or this catch up for what happened during COVID’.”