Election 2022: Unions use interest rate rise to step up pay push

Unions to press for higher pay rises to take account of the interest rate increase and headline inflation rising to six per cent

ACTU secretary Sally McManus. Picture: Liam Kidston

Key unions will press for higher pay rises to take account of the ­interest rate increase and forecast inflation rising to 6 per cent, accusing the Morrison government of inflicting a cost-of-living crisis on Australian workers.

Union leaders said the rate rise would deepen the cost-of-living pressures on workers, with the Electrical Trades Union renewing its commitment to pursue annual pay rises of at least 5 per cent.

“Our members are being bruised at the bowser, smashed at the supermarket checkout and now gouged by their bank, as Scott Morrison’s policy of suppressing wages comes home to roost,” acting ETU national secretary Michael Wright told The Australian.

“We have no option but to seek pay rises in excess of 5 per cent to protect our members from the surging cost of living inflicted on them by the Morrison government.”

United Workers Union national secretary Tim Kennedy said the rate rise was the start of interest rate increases and “another turbocharge to the already increasing cost-of-living pressures”.

“Workers need to increase their wages and are prepared to work hard to achieve significant increases over the next couple of bargaining rounds,” Mr Kennedy said. “The pressure is building and something has got to give – and that is wages must start to rise.”

Australian Workers Union ­national secretary Daniel Walton said AWU members had overwhelmingly identified cost-of-­living pressures as the biggest federal election issue.

“Our job is to fight to ensure their wages keep pace with their cost of living, so obviously today’s rate rise factors into that equation,” he said.

“The Morrison government has done nothing to help Australian workers with wages but now they’re getting squeezed from the other end as well.

“It’s hard to see how this won’t bite at the ballot box.”

Asked if unions would seek higher pay rises to account for the interest rate increase and rising ­inflation, ACTU secretary Sally McManus said unions “will continue to work to fill the void left by this government, which has created the biggest real wage cuts this century”. She said the cost-of-­living crisis had been caused by Scott Morrison’s refusal to act to end the real wage cuts that workers were enduring.

“House prices have increased six times faster than wages under this term of the Morrison government. If Scott Morrison hadn’t been completely missing in action on wages, Australian workers paying off a mortgage would have been better prepared for today’s interest rate rise,” she said.

“This rate rise will only increase the pressure on working people who have been struggling for years to keep up with rising costs of living while their wages go backwards”.

Reserve Bank governor Philip Lowe said the bank expected the headline inflation rate to rise to 6 per cent while the bank’s business liaison suggested wages growth had been picking up.

“In a tight labour market, an increasing number of firms are paying higher wages to attract and retain staff, especially in an environment where the cost of living is rising,” he said.

“While aggregate wages growth was subdued during 2021 and no higher than it was prior to the pandemic, the more timely evidence from liaison and business surveys is that larger wage increases are now occurring in many ­private-sector firms.”

Ms McManus said the Prime Minister had chosen not to support a pay increase for low-paid workers through the Fair Work Commission’s annual minimum wage review.

But Treasurer Josh Frydenberg said Coalition and Labor governments generally gave an economic overview to the annual wage review rather than explicitly nominating a desired pay rise.

He said the government was seeking to drive up wages by driving down the unemployment rate, and the Reserve Bank was seeing proof of wages rising.