Living costs, wages key to last days of the campaign

After Scott Morrison’s superannuation/first-home buyers policy had put fresh wind in the Coalition’s sails, Anthony Albanese talked a big game at the National Press Club on Wednesday. The Opposition Leader promised to increase the wages of workers and the profits of businesses, “without adding inflationary pressure”. He did not explain how. Yet again, he foreshadowed an employment summit between business and trade unions early in the life of a Labor government. Participants would “collaborate on secure work and ensure enterprise bargaining is working effectively”. Labor’s plan to fix the issue is still woefully short of detail after six weeks of campaigning. Mr Albanese has not specified what figure a government he led would recommend to the Fair Work Commission for increasing the minimum wage. In an FWC hearing on Wednesday, the ACTU pressed a claim for a 5.5 per cent minimum wage rise for 2.3 million workers from July 1. Employers are arguing for a 2.5 to 3 per cent increase. Mr Albanese made much of official wages figures released on Wednesday to boost his arguments.

The Australian Bureau of Statistics’ wage price index showed an annual increase of 2.4 per cent across the year to March, up from 2.3 per cent in December. With inflation at a 20-year high of 5.1 per cent, it meant real wages dropping 2.7 per cent over the year. Mr Albanese argued the figures showed “the biggest cuts to real wages in more than 20 years … under Scott Morrison real wages are plummeting while the costs of living are skyrocketing”.

Later in the day, the Prime Minister insisted the minimum wage should be determined by the FWC, not by politicians: “I’m keen to see that people can pay better wages and in seven out of the last eight years their minimum wage has gone up more than inflation,” he said. “When Labor was in power, it’s only three out of six years did that happen. So our government has form in seeing that minimum wage, which has increased by 7 per cent in real terms since we’ve been in government.” The commission had to balance competing factors, Mr Morrison said, including avoiding granting a rise that would drive inflation and interest rates even higher.

The ABS data showed while only 15 per cent of jobs had received a wage rise, the size of the average increase at 3.4 per cent was the highest since mid-2013, pointing to potentially robust pay gains as industrial awards and agreements were reset. Low unemployment, set to fall below 4 per cent for the first time since the 1970s, also will put pressure on pay.

While Mr Albanese was vague about how Labor would breach the shortfall between wages and inflation, he over-egged the potential impact of the Morrison government’s promise of a $2.7bn saving to Australian Public Service expenses over four years across a $327.3bn budget. Mr Albanese made the extraordinary claim that the modest cutback would cost lives. The savings, he said, “ would take “humans out of human services”, resulting in more automated debt-recovery programs. “You know what that leads to: robodebt,” Mr Albanese said. “It doesn’t save money. It costs money because you take humans out of human services, and it has devastating consequences for real people. It costs lives. Lives! As well as over $1bn to taxpayers.”

At the press club, Mr Albanese was fortunate not to be grilled in depth on Labor’s convoluted, taxpayer-funded home-equity scheme, which would apply to only 10,000 people a year. It falls well short of the government’s plan to allow first-home buyers to tap into their own superannuation savings. That plan, announced on Sunday by Mr Morrison, is undoubtedly a factor in the tightening of opinion polls. In a confident performance on Wednesday, one of Mr Albanese’s most iron-clad guarantees, ironically, was that he would not backtrack in honouring the Coalition’s legislated stage-three tax cuts for higher-income workers. These are due to start from mid-2024 and will relieve cost-of-living pressures for many workers, above the inflation rate. Mr Albanese also is backing the Morrison government’s $420 boost to the low and middle-income tax offset.

The opposition faces a big test on Thursday when it releases its policy costings. These will reflect on its commitment to fiscal discipline and post-pandemic budget repair. With polls tightening and showing disparate trends across different types of seats, and with unemployment data due on Thursday, the last three days of the campaign will come down to the key issue of economic management.