CFMEU targets Philip Lowe: RBA chief must go

The CFMEU has demanded ­Reserve Bank governor Philip Lowe resign or be sacked.

CFMEU construction division national secretary Zach Smith accuses Philip Lowe of ‘fighting yesterday’s war’ and called on the Albanese government to sack him if he did not quit. Picture: Aaron Francis

The CFMEU has demanded ­Reserve Bank governor Philip Lowe resign or be sacked, as union leaders hit back at his warnings about the inflationary impact of pay rises, and accuse him of misunderstanding the wages system.

CFMEU construction division national secretary Zach Smith accused Mr Lowe of “fighting yesterday’s war” and called on the Albanese government to sack him if he did not quit.

In a speech on Tuesday, Mr Lowe said Australians need to have confidence inflation would come down and return to target.

“If people think inflation is going to remain high then, understandably, they will adjust their behaviour,” he said.

“Firms will be more willing to put up their prices and workers will seek larger pay rises. If this adjustment in expectations were to happen, high inflation would become entrenched and the end result would be even higher interest rates and a poorer outlook for jobs.”

Unions are furious at the RBA’s decision this week to lift ­interest rates, the 11th increase in 12 months. Responding to the comments, Mr Smith told The Australian “this bloke has completely decoupled from reality and he needs to go. Every day he stays he hurts the nation and working people, because he’s confused and lost in outdated ideology”.

He said “nothing in the data indicates wage growth caused this inflation crisis”.

“No worker should be told to feel guilty about seeking a pay ­increase when corporate profits have been heading to the moon,” he said. “Concentrated corporate power and windfall profits caused this crisis and it is there, and solely there, that the RBA should focus.

“Poor old Phil is fighting yesterday’s war. This isn’t the 1970s. It’s profits, not pay, that’s driving inflation. If he doesn’t do the right thing and resign then the government should sack him.

ACTU secretary Sally McManus said the RBA continued to “misunderstand the wages system in Australia and how hard it is for workers to get pay rises, despite all the evidence for over a decade”.

“Winning pay rises doesn’t get any easier when inflation goes up and any idea that workers across the economy could achieve ongoing pay rises at the current level of inflation is fanciful,” she said.

“The market power of big companies in Australia allows them to price gouge, and it allows them to keep wage rises low. Putting up interest rates based on the wrong assumption of unsustainable wages growth is a serious and damaging error.”

Australian Workers Union national secretary Daniel Walton said the “idea that workers should refrain from seeking higher pay is completely absurd”.

“No member I’ve spoken to recently is chasing some ridiculous pay rise, they’re trying to survive,” he said “You can’t ask ordinary working people and their families to act as shock absorbers.”