Workers will pay for wage-price spiral: Angus Taylor

Workers will ultimately bear the cost of a 1970s-style wage-price spiral, Opposition Treasury spokesman Angus Taylor says.

Angus Taylro says ‘what we don’t need now is a race between wages and prices like we saw in the 1970s, because in the end, wages lose’. Picture: David Mariuz

Opposition Treasury spokesman Angus Taylor says workers will ultimately bear the cost of a 1970s-style wage-price spiral, even as Employment Minister Tony Burke said the government remained committed to “getting wages moving”.

Mr Taylor told The Australian “we’ll always welcome stronger wages – that’s what we want to see. But for that to be sustainable, it has to be based on productivity growth. What we don’t need now is a race between wages and prices like we saw in the 1970s, because in the end, wages lose.”

Mr Taylor called on employers and unions to take “responsible action to drive real wage improvement the right way”, and said fiscal constraint was paramount.

Employment Minister Tony Burke. Picture: AAP

“(Wage increases) have got to be sustainable and have got to be responsible. That means the government has to make the right moves to contain inflation. If you want to contain inflation and rates, you’ve got to contain your budget and be a good economic manager. It’s never too early to worry about it (a wage-price spiral).

“I’m not saying it’s a certainty, but if you lock in wage increases to price increases without productivity gains, you’re locking in a wage-price spiral.

Employment Minister Tony Burke told The Australian wages growth was not to blame for this year’s spike in inflation. “When inflation is low, some people say now is not the time for wage increases because inflation is low.

“When inflation is high, those same people say now is not the time for wage increases because inflation is high,” he said.

“Australian workers have just endured 10 years of flatlining or declining real wages under the Liberals, so it’s not wages driving inflation. The RBA governor confirmed this week that wages can grow faster than they have been without adding to inflation.

“You always have to find a balance – but Labor is committed to getting wages moving,” he said.

ACTU Secretary Sally McManus. Picture: Brendan Beckett

ACTU secretary Sally McManus on Thursday rubbished Reserve Bank governor Philip Lowe’s warnings this week of the danger of entrenching high inflation into the national mindset, saying wage growth remained anaemic and Dr Lowe was trapped in a “boomer fantasy land”.

“We’re not achieving 3.5 per cent, let alone 5 per cent, let alone 7 per cent. And so to think somehow that the system is going to deliver across-the-board pay increases of 5 or 7 per cent is boomer fantasy land,” she said.

“The whole system would be incapable of delivering that. We do not have centralised bargaining in this country. It would not be possible for that to happen.”

The comments came as a new ABS survey revealed almost one-third of Australian employers – and close to two in three bigger businesses – struggled to find staff in June, with most blaming a lack of applicants or suitable skills.

The survey also showed 30 per cent of firms planned on paying their staff more in the coming three months. Close to half of those surveyed reported climbing operating expenses over the past month, or more than double the proportion of a year earlier.

About half of employers in the hospitality and education and training sectors reported they were having trouble getting their hands on workers, and about 40 per cent of retail trade and admin service employers said they were struggling to fill roles.

Employers said they were having trouble finding tradies, clerical workers, labourers, sales staff and hospitality workers. Engineering and IT professionals were also in high demand, the survey revealed.

As businesses struggle with intense labour shortages, industry groups have begun discussions with Treasury officials on the Albanese government’s employment summit, which has been pencilled in for September.