Keep award wages ahead of inflation, govt urges umpire
Low-income workers should be rewarded with a real increase in their wages, but only if it doesn't cause inflation to get out of hand, the federal government says.
In its formal submission to the Fair Work Commission's annual review of minimum and award wages, the federal Labor government said award workers should receive an "economically sustainable real wage increase".
The government did not nominate a specific figure, in keeping with past practice.
Real wages growth means workers' pay packets increase faster than prices rise in the economy, ensuring they are better off overall.
But without accompanying growth in productivity, wage increases exceeding inflation could drive prices higher.
The government's expanded emphasis on "sustainable" real wages growth in this year's submission, compared to the previous year, dovetails with Treasurer Jim Chalmers' comments that there will be a greater focus on boosting productivity during this term of government.
"An increase in minimum and award wages should be consistent with inflation sustainably remaining within the Reserve Bank of Australia's target band (of two to three per cent)," said the submission published on Friday.
The Reserve Bank of Australia has expressed concern Australia's tight labour market could push up inflation, with higher pay rises flowing through to cost pressures for businesses.
In the long term, it is hard for an economy to support real wage growth without productivity growth, said the central bank's head of economic analysis Michael Plumb in a speech at an Australian Business Economists conference in February.
Data released by the Australian Bureau of Statistics on Thursday showed the unemployment rate remained at a historically low 4.1 per cent in April. That has helped annual real wages grow for the past 18 months.
But Australia's productivity growth has cratered in recent years.
Dr Chalmers has said that while the government's first term was primarily about fighting inflation without forgetting productivity, the second term will primarily be about fixing productivity without forgetting inflation.
"The government recognises the importance of lifting productivity to drive real wages growth over the long term and is implementing a significant productivity agenda," the submission stated.
The Fair Work Commission has delivered $143 a week in minimum wage increases since the Albanese government came to power in 2022.
Increasing awards and the minimum wage above growth in market wages will also likely help narrow the gender pay gap, the government said, given women are disproportionately represented in lower-paid, award-reliant jobs.
A landmark ruling by the commission in April meant workers in predominantly feminised industries such as health and child care would receive substantial pay rises of up to 35 per cent.
Asked about this on Thursday, Employment Minister Amanda Rishworth declined to say whether the government would help employers fund the pay rises.
"The government supports the commission's review process and the broader task of identifying and addressing gender undervaluation in the modern awards system and is continuing to participate in the review," the submission said.
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He also backed a failed NSW project to redevelop Sydney's Rosehill Racecourse, describing the controversial proposal as "absolutely right". The proposal aimed to transform the 140-year-old track into a "mini-city" encompassing about 25,000 homes, but it was ultimately voted down by the racecourse owner's members. "That's the sort of thing that we're going to need to do. You can't deal with supply issues without having the courage to do things like that," Mr Albanese said. "(We) want to make sure that housing is fit for purpose and all of that but if we can cut through on some of the red tape, then that will reduce costs." According to the ABS, the increase in residential dwellings was fuelled by housing markets in Queensland, Western Australia and South Australia. While NSW remains Australia's most expensive property market with a median price of $1.25 million, Queensland is not far behind at $944,700. Though prices are rising, further interest rate cuts could slow the pace of increases compared to the same period last year. Data reveals the average price in the ACT went backwards, falling to $941,300, as the Northern Territory maintains the lowest mean price at $517,700. Eliza Owen, head of research at property analyst group Cotality, told AAP it was not a surprise the nation's property market continued to be pushed to record values. "(It comes) off the back of long-term constraint on housing supply, compounded by more recent factors like interest rate reductions, which increase access to finance," she said. Ms Owen noted the interest rate reduction earlier this year helped reinvigorate demand across the housing market on a fairly broad basis. While the average dwelling price has reached seven figures for the first time, Ms Owen said factors such as rate reductions had given markets like Sydney a "sugar hit", rather than triggering a large upswing like the robust growth seen in 2021. Australia's property market continues to strengthen and gain momentum as the value of the average home soars past the $1 million mark for the first time. The national mean dwelling price reached $1,002,500 in the March quarter, a 0.7 per cent increase from the previous three months, according to Australian Bureau of Statistics figures released on Tuesday. Figures from the ABS show the total value of the nation's residential dwellings rose by $130.7 billion to a staggering $11.4 trillion. "We're certainly not going to see the massive increases that we saw during COVID, but we do think house prices will continue to increase, particularly as interest rates are predicted to fall further," she told AAP. Prime Minister Anthony Albanese, speaking at the National Press Club on Tuesday, noted that regulation and red tape had made building and buying a home in Australia too hard. Mr Albanese said it was too complex and expensive to get a project off the ground, adding that Housing Minister Clare O'Neil had been tasked with reducing those barriers. "It is too hard and one of the areas is regulation," he told the National Press Club. He also backed a failed NSW project to redevelop Sydney's Rosehill Racecourse, describing the controversial proposal as "absolutely right". The proposal aimed to transform the 140-year-old track into a "mini-city" encompassing about 25,000 homes, but it was ultimately voted down by the racecourse owner's members. "That's the sort of thing that we're going to need to do. You can't deal with supply issues without having the courage to do things like that," Mr Albanese said. "(We) want to make sure that housing is fit for purpose and all of that but if we can cut through on some of the red tape, then that will reduce costs." According to the ABS, the increase in residential dwellings was fuelled by housing markets in Queensland, Western Australia and South Australia. While NSW remains Australia's most expensive property market with a median price of $1.25 million, Queensland is not far behind at $944,700. Though prices are rising, further interest rate cuts could slow the pace of increases compared to the same period last year. Data reveals the average price in the ACT went backwards, falling to $941,300, as the Northern Territory maintains the lowest mean price at $517,700. Eliza Owen, head of research at property analyst group Cotality, told AAP it was not a surprise the nation's property market continued to be pushed to record values. "(It comes) off the back of long-term constraint on housing supply, compounded by more recent factors like interest rate reductions, which increase access to finance," she said. Ms Owen noted the interest rate reduction earlier this year helped reinvigorate demand across the housing market on a fairly broad basis. While the average dwelling price has reached seven figures for the first time, Ms Owen said factors such as rate reductions had given markets like Sydney a "sugar hit", rather than triggering a large upswing like the robust growth seen in 2021.
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"We want to build an economy where growth, wages and productivity rise together," he said. "The starting point for our government is clear. Our plan for economic growth and productivity is about Australians earning more and keeping more of what they earn." ACTU secretary Sally McManus said working Australians must be at the centre of the roundtable. "We need to leave behind the idea that productivity is equated with cutting pay and making people work harder for less," she said. "We have a common interest in addressing the challenges we face and when we work together our country is at its best." Australian Chamber of Commerce and Industry chief executive Andrew McKellar said boosting productivity was essential for economic growth. "The business community looks forward to participating in the summit and contributing constructive and sensible ideas to address the problem," he said. Shadow treasurer Ted O'Brien said the roundtable could amount to nothing but a talkfest. "Anthony Albanese has actively sought to undermine productivity by abolishing structures to drive it," he said. "He also saddled the economy with thousands of new regulations in the last parliament. "If this change of heart by Labor is true, it will be akin to turning around the Titanic." The prime minister announced Jenny Wilkinson would become the first female Treasury secretary. Ms Wilkinson, who heads the Department of Finance, will replace Steven Kennedy, who will become the nation's most senior public servant as head of the Department of the Prime Minister and Cabinet. They will begin their new roles on Monday for five-year terms. An economic summit on lifting lagging productivity rates can serve common interests for the business sector and unions, the prime minister says. Anthony Albanese has announced plans for a productivity roundtable in August in Canberra to shape the nation's economic growth. Experts have expressed concern about Australia's lagging rate of productivity, a key economic measure of efficiency and long-term driver of improved living standards. Despite criticism previous economic summits were too slanted towards unions, Mr Albanese said outcomes from the roundtable had not been decided. He called for a mature discussion from all parties, noting it was in everyone's interest for productivity to improve. "We're a Labor government, we support unions existing ... but we will always respect both the role of business and the role of unions," he told the National Press Club on Tuesday. "There are common interests ... you don't get union members unless you've got successful employers. "It's the private sector that drives an economy. What the public sector should do is facilitate private sector activity and private sector investment." The Productivity Commissioner's most recent report showed labour productivity fell 0.1 per cent in the December quarter and dropped 1.2 per cent in the past year. The Business Council of Australia says productivity growth over the past decade has been the lowest in 60 years. Council chief executive Bran Black welcomed the roundtable, saying "lifting business investment is essential to boosting productivity, lifting real wages, creating jobs and ensuring more opportunity for more Australians". "We will continue to be very clear about policies that the business community believes will be counterproductive to improving productivity," he said. Mr Albanese said he wanted a boost to productivity, alongside other economic indicators as part of his second-term agenda. "We want to build an economy where growth, wages and productivity rise together," he said. "The starting point for our government is clear. Our plan for economic growth and productivity is about Australians earning more and keeping more of what they earn." ACTU secretary Sally McManus said working Australians must be at the centre of the roundtable. "We need to leave behind the idea that productivity is equated with cutting pay and making people work harder for less," she said. "We have a common interest in addressing the challenges we face and when we work together our country is at its best." Australian Chamber of Commerce and Industry chief executive Andrew McKellar said boosting productivity was essential for economic growth. "The business community looks forward to participating in the summit and contributing constructive and sensible ideas to address the problem," he said. Shadow treasurer Ted O'Brien said the roundtable could amount to nothing but a talkfest. "Anthony Albanese has actively sought to undermine productivity by abolishing structures to drive it," he said. "He also saddled the economy with thousands of new regulations in the last parliament. "If this change of heart by Labor is true, it will be akin to turning around the Titanic." The prime minister announced Jenny Wilkinson would become the first female Treasury secretary. Ms Wilkinson, who heads the Department of Finance, will replace Steven Kennedy, who will become the nation's most senior public servant as head of the Department of the Prime Minister and Cabinet. They will begin their new roles on Monday for five-year terms. An economic summit on lifting lagging productivity rates can serve common interests for the business sector and unions, the prime minister says. Anthony Albanese has announced plans for a productivity roundtable in August in Canberra to shape the nation's economic growth. Experts have expressed concern about Australia's lagging rate of productivity, a key economic measure of efficiency and long-term driver of improved living standards. Despite criticism previous economic summits were too slanted towards unions, Mr Albanese said outcomes from the roundtable had not been decided. He called for a mature discussion from all parties, noting it was in everyone's interest for productivity to improve. "We're a Labor government, we support unions existing ... but we will always respect both the role of business and the role of unions," he told the National Press Club on Tuesday. "There are common interests ... you don't get union members unless you've got successful employers. "It's the private sector that drives an economy. What the public sector should do is facilitate private sector activity and private sector investment." The Productivity Commissioner's most recent report showed labour productivity fell 0.1 per cent in the December quarter and dropped 1.2 per cent in the past year. The Business Council of Australia says productivity growth over the past decade has been the lowest in 60 years. Council chief executive Bran Black welcomed the roundtable, saying "lifting business investment is essential to boosting productivity, lifting real wages, creating jobs and ensuring more opportunity for more Australians". "We will continue to be very clear about policies that the business community believes will be counterproductive to improving productivity," he said. Mr Albanese said he wanted a boost to productivity, alongside other economic indicators as part of his second-term agenda. "We want to build an economy where growth, wages and productivity rise together," he said. "The starting point for our government is clear. Our plan for economic growth and productivity is about Australians earning more and keeping more of what they earn." ACTU secretary Sally McManus said working Australians must be at the centre of the roundtable. "We need to leave behind the idea that productivity is equated with cutting pay and making people work harder for less," she said. "We have a common interest in addressing the challenges we face and when we work together our country is at its best." Australian Chamber of Commerce and Industry chief executive Andrew McKellar said boosting productivity was essential for economic growth. "The business community looks forward to participating in the summit and contributing constructive and sensible ideas to address the problem," he said. Shadow treasurer Ted O'Brien said the roundtable could amount to nothing but a talkfest. "Anthony Albanese has actively sought to undermine productivity by abolishing structures to drive it," he said. "He also saddled the economy with thousands of new regulations in the last parliament. "If this change of heart by Labor is true, it will be akin to turning around the Titanic." The prime minister announced Jenny Wilkinson would become the first female Treasury secretary. Ms Wilkinson, who heads the Department of Finance, will replace Steven Kennedy, who will become the nation's most senior public servant as head of the Department of the Prime Minister and Cabinet. They will begin their new roles on Monday for five-year terms. An economic summit on lifting lagging productivity rates can serve common interests for the business sector and unions, the prime minister says. Anthony Albanese has announced plans for a productivity roundtable in August in Canberra to shape the nation's economic growth. Experts have expressed concern about Australia's lagging rate of productivity, a key economic measure of efficiency and long-term driver of improved living standards. Despite criticism previous economic summits were too slanted towards unions, Mr Albanese said outcomes from the roundtable had not been decided. He called for a mature discussion from all parties, noting it was in everyone's interest for productivity to improve. "We're a Labor government, we support unions existing ... but we will always respect both the role of business and the role of unions," he told the National Press Club on Tuesday. "There are common interests ... you don't get union members unless you've got successful employers. "It's the private sector that drives an economy. What the public sector should do is facilitate private sector activity and private sector investment." The Productivity Commissioner's most recent report showed labour productivity fell 0.1 per cent in the December quarter and dropped 1.2 per cent in the past year. The Business Council of Australia says productivity growth over the past decade has been the lowest in 60 years. Council chief executive Bran Black welcomed the roundtable, saying "lifting business investment is essential to boosting productivity, lifting real wages, creating jobs and ensuring more opportunity for more Australians". "We will continue to be very clear about policies that the business community believes will be counterproductive to improving productivity," he said. Mr Albanese said he wanted a boost to productivity, alongside other economic indicators as part of his second-term agenda. "We want to build an economy where growth, wages and productivity rise together," he said. "The starting point for our government is clear. Our plan for economic growth and productivity is about Australians earning more and keeping more of what they earn." ACTU secretary Sally McManus said working Australians must be at the centre of the roundtable. "We need to leave behind the idea that productivity is equated with cutting pay and making people work harder for less," she said. "We have a common interest in addressing the challenges we face and when we work together our country is at its best." Australian Chamber of Commerce and Industry chief executive Andrew McKellar said boosting productivity was essential for economic growth. "The business community looks forward to participating in the summit and contributing constructive and sensible ideas to address the problem," he said. Shadow treasurer Ted O'Brien said the roundtable could amount to nothing but a talkfest. "Anthony Albanese has actively sought to undermine productivity by abolishing structures to drive it," he said. "He also saddled the economy with thousands of new regulations in the last parliament. "If this change of heart by Labor is true, it will be akin to turning around the Titanic." The prime minister announced Jenny Wilkinson would become the first female Treasury secretary. Ms Wilkinson, who heads the Department of Finance, will replace Steven Kennedy, who will become the nation's most senior public servant as head of the Department of the Prime Minister and Cabinet. They will begin their new roles on Monday for five-year terms.
