An inflation-matching wage bump could further fuel
inflation, complicating the job of the Reserve Bank which is
expected to pause rate hikes at its meeting next Tuesday. Prices
eased to 6.8% in the year to February, the slowest pace since
June last year.
Governor Philip Lowe said this month that the risk of a
prices-wages-spiral remained low but the bank was alert to the
risk given tight labour markets and high prices. The wage price
index rose 3.3% in the December quarter versus a year earlier,
compared to 7.8% for inflation over the same period.
The FWC decision, expected in June, also covers minimum
wages and conditions for specific industries and occupations,
known as awards. Roughly 2.7 million Australians are covered by
awards, compared to around 180,000 on the minimum wage.
Catherine Birch, a senior economist at ANZ, said the FWC
would likely lift the minimum wage further than award wages,
given the latter's broader reach. She expected award wages to
rise around 4.6%, similar to last year.
"We're expecting this will be one contributor to
accelerating wage growth through this year and into 2024," she
said.
The Australian Chamber of Commerce and Industry submission
on Friday called for an increase in minimum and award wages of
up to 4%, which included a legislated 0.5% increase in mandatory
pension savings.
(Reporting by Lewis Jackson; Editing by Lincoln Feast and
Edwina Gibbs)
(Adds data and analyst comment)
By Lewis Jackson
SYDNEY, March 31 (Reuters) - Prime Minister Anthony
Albanese said on Friday he would welcome lifting the minimum
wage to match inflation, although his government's submission to
an independent wage-setting body did not go so far as to
recommend a specific increase.
The government submission recommended real wages for
low-paid workers "do not go backwards" but added it was not
suggesting wages should "across-the-board" automatically rise
with inflation.
Changes to the national minimum wage are reviewed annually
by the independent Fair Work Commission (FWC), which last year
delivered an increase largely in line with inflation. The
Australian Council of Trade Unions has called for a 7% increase
to match inflation again.
"If the Fair Work Commission makes that decision then I
would welcome it, but it is an independent decision of
government. It's up to them to determine the range of factors
they'll consider," Albanese told ABC Radio.
"My values haven't changed," he said.
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