No ‘special magical powers’ to make wages rise: PM

Prime Minister Scott Morrison has refused to back an increase in the national minimum wage above the rate of inflation despite the household expenses of Australians ballooning and mortgages taking a hit.

In the thick of an election campaign focused on the cost of living, Morrison said it was the role of the workplace umpire to set the wage floor and he did not have “special magical powers” to give Australians a pay rise.

Prime Minister Scott Morrison appraises his ‘Strong economy, strong future’ cake at Abla’s Pastries in Granville in the seat of Parramatta on Thursday.Credit:James Brickwood

“We’ve always believed that the Fair Work Commission should make the decision independently of the government based on the evidence. That’s why they are appointed for that purpose,” Morrison said after promising the Coalition would create 400,000 more small businesses if re-elected.

“Now, we’ve always taken the same position when it comes to the decisions of the Fair Work Commission. They make their decisions based on the best information they have and we provide that information to them to assist them with their decision, and we always have and we intend to continue to follow that.”

The question was put to Industrial Relations Minister Michaelia Cash’s office on Wednesday, however, The Sydney Morning Herald and The Age received no response.

The commission is in the midst of its annual minimum wage review, which will lock in a basic hourly rate for low-paid workers, currently sitting at $20.33, and affect the pay of other workers on higher industry awards.

The federal government has already made a submission to that process, saying the outcome of the review “should support the economy and labour market, balancing improving living standards for Australians with ensuring the viability of employing businesses”.

“The Australian economy is recovering strongly from the impact of the COVID-19 pandemic, with the recovery forecast to continue and drive further employment growth. However, the ongoing pandemic, Russian invasion of Ukraine, strained supply chains and rising inflationary pressures all present risks to the global and domestic outlooks,” the April submission says.

The NSW government has called for a “cautious approach” while the Victorian government supports a 3.5 per cent rise.

The federal budget forecast inflation of 3 per cent through 2022-23.

The Reserve Bank this week lifted the official cash rate to 0.35 per cent after the biggest jump in prices in 22 years. Headline inflation was 5.1 per cent in the year to the end of the March quarter and underlying inflation 3.7 per cent. RBA governor Philip Lowe said the bank expected headline inflation of around 6 per cent and underlying around 4.75 per cent for 2022, with both moderating to around 3 per cent by mid-2024.

Woolworths boss Brad Banducci and Wesfarmers managing director Rob Scott both made comments on Tuesday supporting wage rises, with Banducci backing calls from the Australian Retailers’ Association for an increase in the minimum wage in line with the underlying rate of inflation.

The Australian Council of Trade Unions has previously called for a 5 per cent increase to the minimum wage, to be set for the next financial year, however, that figure is likely to be increased. An ACTU spokesman said the union movement was considering all recently published data and would soon make another Fair Work submission.

Labor leader Anthony Albanese has made increasing wages and gender equity a key election pitch, underlined by a policy platform that includes making secure work an object of the Fair Work Act.

Morrison said Albanese “is walking around in this election, pretending that he has some special magical powers to make wages go up and costs go down, and you don’t as a prime minister, you don’t have that”.

“What you do, is you run government policies that support employment in the economy that ensures unemployment comes down, which ensures that wages can rise,” Morrison said, leaning on the RBA’s latest forecast of unemployment reaching 3.5 per cent by early 2023.

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