Bill Shorten warns of Josh Frydenberg’s ‘Christmas fairytales’ ahead of MYEFO

The prospect of Australians’ wages rising has been described as ‘Christmas fairytales’ ahead of the mid-year economic update.

Labor is urging Australians to take Treasurer Josh Frydenberg’s announcement that wages will increase with a “grain of salt”, warning that the government is telling “Christmas fairytales”.

At Thursday’s Mid-Year Economic and Fiscal Outlook, Mr Frydenberg will announce an upgraded wage forecast, including an announcement that full-time workers could expect a $2500 annual pay increase over the next four years.

But Labor MP Bill Shorten says he does not share the government’s optimism, telling Sunrise that families could be left behind.

“I think there will be a bounce back out of Covid, people have been saving money (and) they’ve got money to spend,” he said.

“But, you know, I do think that Mr Frydenberg might be telling some Christmas fairytales about wages.

“For the last eight years, wages have basically been in the toilet, they haven’t increased at all.

“Whenever the government said they’re going to go up, they don’t go as far up as the government promises. So I take with a big grain of salt when he says wages are going to miraculously jump up, they haven’t under this government.

“I still worry that ordinary, everyday families are going to see cost of living moving faster than wages.”

Bill Shorten has urged Australians to take the government’s wage growth announcement with a grain of salt. Picture: NCA NewsWire / Gary Ramage

The MYEFO could be the government’s last change to spruik its economic recovery out of Covid-19 if Prime Minister Scott Morrison calls an election before the scheduled March 29 federal budget.

The budget update will also show that Treasury expects the unemployment rate to fall to 4.5 per cent by the middle of next year and down to 4.25 per cent the year after, which would be the lowest sustained level since before the global financial crisis.

In order to do that, Mr Frydenberg is expected to announce a pledge to create one million new jobs – 150,000 more than was announced in the May budget.

Mr Frydenberg said those jobs would be in manufacturing and hospitality among others.

Treasurer Josh Frydenberg is expected to announce a one million jobs pledge. Picture: NCA NewsWire / Nicki Connolly

“We are creating new industries in defence, space, critical minerals that are also creating jobs,” he told Sunrise.

“It reflects the momentum we have in economic recovery. Business and consumer confidence are up, job ads are the highest level in 13 years.

“Australia has maintained its AAA credit rating and very strong investment coming from businesses big and small – a sign that people have confidence in our economic recovery.”

Mr Frydenberg has asked Australians not to waiver over the Christmas period despite the perceived risk of Omicron.

“Australians can be confident and optimistic about the Christmas period and into next year,” he said.

“The vaccination rates, higher than any other country in the world, have a proven defence against the virus, and at the same time our economy is rebounding more strongly than any other country around the world.”