Outlook Conference: Anthony Albanese sticks to his guns on getting wages going

Anthony Albanese will promise to deliver Labor’s election pledge to lift pay for workers under a five-point plan.

Anthony Albanese on Wednesday will say that ‘getting wages moving again’ is a critical focus for the government as it moves to contain skyrocketing inflation. Picture: NCA NewsWire / Andrew Henshaw

Anthony Albanese will promise to deliver Labor’s election pledge to lift pay for workers under a five-point plan, including helping Australians into higher paying jobs, fixing the “broken bargaining ­system” and delivering a real ­increase in the minimum wage.

After the budget last week warned that real wages wouldn’t begin rising until mid-2024, the Prime Minister on Wednesday will say that “getting wages moving again” is a critical focus for the government as it moves to contain skyrocketing inflation.

Speaking at The Australian-Melbourne Institute Outlook conference, Mr Albanese will say “a different mindset and a different model” is required in response to economic conditions. “A critical part of that is getting wages moving again: delivering a real increase in the minimum wage, supporting a meaningful, long overdue pay rise for aged care workers, closing labour hire loopholes that drive down pay and undermine security,” Mr Albanese will say.

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“Fixing the broken bargaining system, helping more workers in low-paid sectors like disability care and early childhood education negotiate with their employers for a better deal and fee-free TAFE courses, more uni places, more ­apprenticeships – skilling people up for higher paying jobs.”

After announcing a seventh-consecutive rate hike on Tuesday, Reserve Bank of Australia governor Philip Lowe said while wages growth continued to pick up from the low rates of recent years, “it ­remains lower than in many other advanced economies”.

“A further pick-up is expected due to the tight labour market and higher inflation,” Dr Lowe said.

Delivering his keynote Outlook conference address on Wednesday morning, Jim Chalmers will warn of the “pervasive” impact of unchecked inflation on wages and household budgets.

“We know that inflation limits aspiration. Erodes the purchasing power of take-home pay and reduces the value of hard-earned savings,” Dr Chalmers will say. “It also corrodes the real return on investment, it threatens the growth prospects of economies and eats away at the foundations of opportunity.”

With the RBA upgrading its inflation forecast for the December quarter to 8 per cent, the Treasurer will say the budget had responded to the “inflation challenge from both sides – supply and demand”.

“Inflation was the primary ­consideration influencing our approach to cost-of-living relief, to investing in the supply-side drivers of growth, and to budget repair. Letting the substantial and welcome boost to revenues flow through to the budget was all about ensuring we didn’t add to demand,” he will say.

“That’s how we lined up our ­fiscal policy with the bank’s monetary policy, how we avoided the situation we saw in the United Kingdom in recent weeks.”

Dr Chalmers will attack the ­Coalition’s spending and fiscal management, arguing that ­approach would be “wrong, risky, counter-productive and costly” in a high-inflationary environment.

“(Labor’s) approach marked a complete step-change from the March budget, and from the ­recent budgets before it. Where 2.6 per cent real spending growth was the previous government’s average before the pandemic.

“Where returning only 40 per cent of improved tax receipts to the bottom line was the historical norm. And where the fiscal impact of new policies stretched into the tens of billions – $30.4bn in the March ’22 budget alone, with no new expenditure savings.”

Mr Albanese will say the ­budget banked more than $100bn in revenue upgrades to the bottom line, including 99c in every dollar for the first two years and 92c in the dollar over the forward ­estimates.