Treasurer Jim Chalmers has clashed with Sunrise presenter David Koch over union calls to raise wages by seven per cent, fearing it could push inflation higher.
The ACTU is demanding that the Fair Work Commission raise the minimum wage by seven percent to keep pace with inflation in its next review in June.
But a Sydney pub owner, already battling higher costs, including a 17 percent increase in electricity bills, has warned the move could cost jobs if implemented.
Kochie demanded to know whether the treasurer supported the union appeal and whether he was concerned it could trigger a wage spiral that would fuel further inflation.
But Dr Chalmers has hit back by labeling the claims as ‘absolute nonsense’ and insisted that wage increases for Australia’s low-wage workers were not the cause of the current cost-of-living crisis.
Treasurer Jim Chalmers has clashed with Sunrise presenter David Koch over union calls to raise wages by seven per cent over fears it could push inflation higher
“How do you explain to the unions that they cannot go for a seven percent minimum wage increase?” Koch asked Thursday.
“Inflation is coming down — inflation could hit two or three percent in October, and a seven percent increase in the minimum wage would only fuel inflation.
“You’re going to have a wage spiral that the Reserve Bank is warning about.”
Dr. Chalmers insisted the government would not recommend a particular figure, but admitted they would like to see the low-paid get a “meaningful” raise.
“That’s one of our highest economic priorities,” he said. “It’s just common sense to start with the lowest paid Australians who have been missing for a very long time.
“If you were to make a list of all the things that are giving us this inflationary challenge in our economy, low-wage workers who are overpaid would not be on that list.
“We have an inflationary problem because of the war in Ukraine and broken supply chains, which have been ignored here in Australia for a decade, making people more vulnerable to these international shocks.”
He added: ‘We don’t have a wage-price spiral. There’s no indication that we have one.
“And we think making sure the low-wage earners in particular can earn enough to support their loved ones is an important way for people to deal with this costly pressure, not a contributing factor.”
He later added on ABC Radio: “Some people want to pretend we have an inflation problem in our economy because the lowest paid Australians are being overpaid, which is of course absolute nonsense,” said Chalmers.
Geelong road worker Cristy Kavanagh said she had to work 50 hours a week to make ends meet and was missing out on time with her five children.
“I’m not home until five, six at night and my kids are suffering,” she said.
“And if we want to go to the movies, it’s $150, $200 — maybe we can do that once a month if we’re lucky.”
Geelong road worker Cristy Kavanagh (pictured) said she had to work 50 hours a week to make ends meet and was missing out on time with her five children
Café boss Valerio Domenici of Artarmon on Sydney’s lower north coast (pictured) warned the wage increase could mean huge costs for small businesses
But pub owner Valerio Domenici of Artarmon on Sydney’s lower north coast warned the wage increase could mean high costs for small businesses.
“With everything we’ve been through, I think it would hurt like hell,” he told the show.
‘I don’t want to contribute to unemployment – and that’s really the most important thing. That’s what really happens.
‘The first thing you’re going to cut back on is of course your staff.’
He added: “We have been through a lot of turmoil over the past three years, like everyone else. But it will definitely put us in a big predicament.
“We have some very, very difficult decisions to make.”
The ACTU wants the hourly minimum wage to rise to $22.88 starting July 1 to keep up with inflation that was 6.8 percent in yesterday’s latest official figures for the year through February.
“We need to support those who are hurting the most and raising the cost of living to minimum wage is the direct way to do this,” ACTU Secretary Sally McManus said.
There is no wage-price spiral in Australia. Instead, companies have made huge profits, driving inflation through excessive price increases.
“It’s time they admit they can afford to pay their employees more.”
Inflation has eased since reaching a 32-year high of 7.8 percent in December, falling slightly to 7.4 percent in January, according to the Australian Bureau of Statistics’ monthly update.