Federal government declares war against the Reserve Bank over its minimum wage push

The Labor Government’s push for a 4 per cent minimum wage increase has effectively set it against RBA governor Michele Bullock’s desire for a wage moderation and productivity increases.

The Albanese Labor Government and Treasurer Jim Chalmers in particular have effectively declared war on all – what are now, give or take the last 100,000 migrants – 27m Australians; and war on one of the 27m in depressing and dangerous particular.

That person is Reserve Bank governor Michele Bullock.

Prime minister and Treasurer are daring her to, indeed demanding that she, hike interest rates.

Although, to be fair, PM Albanese would have about as much clue as would President ‘where’s my chocolate-chip ice cream?’ – Biden.

The duo, and indeed, the combined, entire cabinet – for what’s that worth – are doing so by demanding the Fair Work Commission lock (at least) 4 per cent into the next minimum wage decision.

They have further underlined their intent – and stupidity – by demanding the FWC not takeany account of – that is to say, discount the wage rise for – the revamped Stage Three Tax cuts, which delivers more money to lower income earners.

That is, further to say, by the bye, how Chalmers self-identifies as a 21st century version of a “learn nothing” Bourbon.

For despite being an, again, self-identified (Paul) Keating acolyte, Chalmers obviously doesn’t understand that is precisely what the Prices and Incomes Accord between Keating (and PM Hawke) and the ACTU’s Bill Kelty and Simon Crean did.

It precisely traded tax cuts for desperately needed wages moderation.

And as Bullock has spelt out, again and again: that is precisely what we need in 2024 – wages moderation. And a productivity surge.

She has made it very clear that 4 per cent wage increases are incompatible – utterly incompatible – with getting inflation sustainably below 3 per cent.

The reason is abysmal productivity.

Yes, we could have 4 per cent wage rises, if productivity was running at around 1.5 per cent.

In fact, productivity is going backwards.

First, because this is a government that is functionally anti-productivity, right across the board from energy insanity and shortage, to heading so determinedly back to an anti-productivity (and pre-Keating) 1970s IR future.

And second, with the insane and utterly out-of-control immigration – substituting more workers for more efficiency.

Yes, if this Government was aggressively embarked on promoting win-win productivity deals between business and workers; and was aggressively embarked on delivering business – and consumers – cheap, reliable, plentiful, ‘old-fashioned’ electricity.

By ‘old-fashioned’, I mean electricity that works: coal and gas-fired.

Yes, then, it would be both sensible and fair to urge the FWC to deliver inflation-equalling minimum wage increases.

And not discount for the ‘social wage’ of the (ultimately, in truth, bracket-creep postponing, fake) tax cuts.

But that’s not the case.

Did anyone in Canberra – including Treasurer head Stephen Kennedy who sits on and voted for the last RBA rate decision – actually read, far less understood what Bullock said?

Right now, she/ the RBA might cut, to respond to a slowing economy?

Or it will hike to fight sticky 3 per cent-plus inflation?

And what will clearly swing it one way: too-high wage rises, given the abysmal productivity?

Your call Treasurer; and boy have you called it wrong. Twenty-seven million Australians will feel the pain.