Wage freeze, cost of living crisis and the loss of perspective on it all by corporate Australia | David Penberthy

The financial mood of working people right now is frayed and frazzled. Of all the lobby groups and advocates in Australia, there’s one that gets it, writes David Penberthy.

If you want to hear what a complete loss of perspective amid a cost of living crisis sounds like, Ben Fordham’s show on Sydney radio station 2GB provided the perfect case study this week.

As Australian renters struggle to find properties and those who do have them are hit by surging rents, Fordham was discussing a contentious proposal from the NSW Greens for a two year nationwide freeze on rent increases to prevent landlords from jacking up rents as they please.

A bloke rang into the show to explain that many landlords were less affluent than people thought, and had chosen to forgo superannuation and were instead living off rental incomes from their modest investment property.

“My rental incomes back to me last year was 3.1 per cent, that’s what I earnt,” the caller said.

“Now, if they want to do a freeze on that, are the local, state and federal governments going to do a freeze on their incomes?

“Because the Queensland government charged me 2.25 per cent land tax, so I’m paying nearly $7000 a property per year in land tax.”

Fair point, well made.

Fordham then asked the caller how many investment properties he owned.

“Just under 300,” he replied sheepishly.

He was then more specific.

He owns 283.

The caller went into defensive mode saying he had bought his first property when he was 17 and had worked hard to acquire them all.

No doubt he had. But while you should never knock a bloke for getting ahead, the man’s alarm about the apparently life-altering threat of a rental freeze seemed somewhat misplaced, given that he owns half a suburb.

This tale strikes me as a handy metaphorical entry point to the national discussion about wages growth, or more precisely, the fact that for several years now wages have not grown at all.

ACTU leader Sally McManus. Picture: Jane Dempster

While at the same time, thanks to Covid, Ukraine, natural catastrophes, supply chain issues, and all the other unpleasantness that’s been unfolding, the cost of everything from an iceberg lettuce to a modest two-bedroom apartment has gone through the roof.

Earlier this week a mate of mine who works for the Property Council asked me to say a few words about the dark art of journalism at the organisation’s national conference.

I got a good question from the floor which was something I had not pondered before, and the answer I came up with surprised me.

The question was: of all the lobby groups and advocates in Australia right now, which one is the most effective?

After being briefly flummoxed I opted for Sally McManus from the Australian Council of Trade Unions.

She might not be a media star, and some of the positions she advocates could arguably decrease the capacity of business to keep people in employment, but I have no doubt that right now there is no-one in Australia who is reading the room better when it comes to public sentiment over wages.

In part, she has had a rail’s run on this issue because it follows years of instinctive, tight-fisted negativity from employer and industry groups about the question of wages.

I cannot remember any of the key employer groups ever coming out in favour of a minimum wage increase, or any other wage increase for that matter.

There are many individual employers who know that a happy workforce is a productive workforce and use enterprise agreements accordingly, with sustainable payrises that reflect the living costs their workers face.

Sally McManus joined local aged care workers, members of the AWU and the Queensland Council of Unions, to rally in front of Regis Whitfield. Picture: Emily Barker

But at the industry leadership level, these blokes usually display all the warmth and compassion of the lawyers employed by nuclear power plant owner Montgomery Burns in The Simpsons.

Working in talkback radio with a big suburban and outer suburban audience, the financial mood of working people right now is frayed and frazzled. In our bigger and more expensive cities, even people who are middle class and have a couple of kids at private school are living pay check to paycheck.

The Albanese Government is under huge pressure from business to make sure that it does not mismanage the wages question. Politically, Albo does not want to turn into Gough within the first six months of his election win. Older voters will recall that economic chaos after 1972, much of it stemming from wages policy under the far left leadership of people such as Dr Jim Cairns, who believed vast pay rises in the public sector should be used as pacesetters for similar generosity in the private sector.

The Albanese Government is under huge pressure from business to make sure that it does not mismanage the wages question. Picture: Jonathan Ng

But in terms of managing punter-level expectations, the argument is running much more in the direction of Sally McManus than anyone representing corporate Australia.

There was a study released this week by the Australian Services Union which was somewhat over-egged. It compared the salaries of chief executive officers with average workers, and billed the figures as a comparison of average wages versus all executive wages, when the truth is there are plenty of lower-level and middle-level executives who are paid not much more than an upper-level FIFO miner who is riding the minerals boom in WA. But despite the headline-grabbing use of statistics by the ASU, the research contained a truth that goes to the lack of awareness displayed by Ben Fordham’s talkback caller. It showed how chief executive salaries are now on average 130 times that of the staff they employ. It gave the case of one supermarket CEO who earned $11.8 million in 2021 while his average employee received between $49,234 and $55,432. Running a supermarket over the past three years is something anyone with half a brain could have done, too. They were the only shops that were open for most of 2020.

Business can quibble about the accuracy of things like the ASU survey. But as Sally McManus herself would probably say, most average people would believe every word of it anyway. To them, it is what life feels like, a point lost on the cufflink-clad spokespeople for every lobby group in the land.