Wages not fuelling inflation, Burke says

by | June 19, 2022 09:56 | News

Employment Minister Tony Burke does not believe wages growth is about to further fuel inflation, saying pay rates have suffered a decade of stagnation.

Last week the Fair Work Commission endorsed a 5.2 per cent increase for low-paid workers, roughly in line with the current rate of inflation, although the Reserve Bank of Australia now expects it to hit seven per cent this year.

“Inflation is not being driven by high wage growth,” Mr Burke told Sky News’ Sunday Agenda program.

“We don’t have high wage growth. The wage price index has been running at 2.4 (per cent) at the same time that inflation was coming in at 5.1 (per cent).”

He said some of the drivers of inflation are international, some of them are from previous government neglect.

The Labor government is expected to hold a jobs summit in late September or early October to bring government, business and unions together.

“I want to get wages moving and enterprise bargaining has been the best way of doing that hand-in-hand with productivity,” Mr Burke said.

“Wage stagnation happened when we were told we couldn’t have wage improvements because inflation was low, now some people are arguing we can’t have wage improvements because inflation is high.”

Asked if pensions and the JobSeeker payment, will be increased in line with inflation like the minimum wage, Mr Burke said these will assessed in the October budget.

“We said during the campaign all of those benefit payments get reassessed for what’s affordable every budget,” he said.

Shadow treasurer Angus Taylor warned interest rate pressures are very significant right now.

“The question is what is the government going to do to alleviate that,” he told Sky News.

“They need to make sure they are doing everything in their power in their economic management polices to bring downward pressure on interest rates.”

He declined to say whether Australia faces a recession as is feared to be happening in the US.

“(Treasurer) Jim Chalmers has promised there is not going to be one, I hope he is right,” Mr Taylor said.

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