Chris Bowen to tackle lack of wage growth in Press Club speech

YOUR lack of a pay rise isn’t just hurting you. Thousands of other Australians are struggling to bridge the gap between pay increases and inflation.

YOUR pay packet will dominate political and economic debate today with official figures set to confirm wage rises are lagging well behind the cost of living.

Leading banks expect wage growth to have been just 1.9 per cent in the three months to the end of March, while inflation was over two per cent.

Labor intends to accuse the Government of crushing family finances. Not only will they highlight the plight of pay packets, but Budget measures increasing the Medicare levy on households with modest incomes, the reduction in Sunday penalty rates, and the warning by the Catholic school system it could have to increase fees because of changes in funding.

Shadow treasurer Chris Bowen today will scoff at Treasurer Scott Morrison’s Budget promise of “better days ahead”.

Mr Bowen will use a National Press Club address to challenge “overly optimistic” Budget forecasts that wages will grow by 3.75 per cent annually within four years.

“A pretty big bounce given the spare capacity and record underemployment we are currently seeing in the labour market, together with the cut in penalty rates and the fact the budget papers show the unemployment rate isn’t expected to fall that much,” Mr Bowen is expected to say.

The wage freeze is on top of “the record level of household indebtedness”.

And slow wage growth means the Government might not get the increased tax revenue needed to reach a Budget surplus by 2021.

Labor will target “fairness” issues which have been worsened by minimal pay rises.

It will argue the Budget measures would force middle income earners to give up more of their frozen wages in tax while the well-off would get a tax cut with removal of the deficit levy.

It will claim that an executive on $1 million would get a $16,400 tax cut, while a teacher on $55,000 a year would have to pay $275 more.

Mr Bowen will accuse Treasurer Morrison of a lack of consistency.

“On becoming Treasurer, he told us that his over-riding objective was lower personal income tax.

On multiple occasions he told us he wanted large, swingeing tax cuts,” Mr Bowen will say.

“He told us he was passionate about it. The notion of a revenue problem was airily eschewed.

“Eventually, he delivered modest tax cuts last year. And he took them back this year.

Far from big personal tax cuts, personal tax was increased this budget by $8 billion.

“I’d hate to see what the Treasurer would do if he actually thought Australia had a revenue problem.”