Labor created a perception about higher pay to win the election. But that all changed in the last seven days, and now it must deal with the fallout.
It was Labor’s signature catchcry of the election campaign and one designed, intentionally, to assure voters that would no longer be the case if there were a change of government.
Labor’s immediate goal was to put the election result beyond doubt and worry about the details later. Albanese would simply hold up a $1 coin at his daily press conference and ask, generically, what sort of tightwad would deny the lowest paid an hourly increase of such an amount?“The cost of everything that they buy is going up, but their wages aren’t. Scott Morrison says that that’s OK,” he said.
It became time to “worry about the detail” – as the strategist forecast during the campaign – and dampen expectations that wage rises linked to inflation would become the norm., federal Treasurer Jim Chalmers clarified that the government’s submission to the Fair Work Commission for a headline inflation-linked pay rise was a “special circumstance”.
“We want to work with business around making their workers more productive,” he said. “But in the near term, we thought that there was an important case to be made for low-paid workers, the heroes of the pandemic, to get them the kind of outcome that the Fair Work Commission delivered.”, arguing that although pay rises above 3.5 per cent were possible “for a short period time”, anything beyond that risked a wage-price spiral that would inevitably result in aggressive interest rate increases.
That spiral, she said, was a product of now-obsolete provisions such as centralised wage fixing and pattern bargaining, which enabled wage increases to spread quickly across the entire workforce. “Business profits are driving inflation, not workers’ pay increases. Businesses are passing on price increases and some are gouging. This means working people are paying the price at the supermarket, with their bills as well as with real wage cuts. This is not fair or reasonable.”Alex Ellinghausen“I hate to say we told you so, but we told you so, that this would be the consequence of the Fair Work Commission’s decision to grant a 5.
“He said that he didn’t want wage increases with a four or five to become too common. So, it’s not like 3.5 per cent is there as a cap, but he has issued a warning that we’re not currently in a wage crisis spiral, and he’s wanting to make sure we don’t end up getting into one,” he said.
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