Stronger wages growth needed across the economy

15 June 2022

The independent Fair Work Commission’s minimum wage increase is welcome relief for low-income earners but to control inflation, keep unemployment low and living standards high, Australia must get to work building a stronger, more productive economy, Business Council chief executive Jennifer Westacott said.

“Higher wages are a good thing for low paid workers, but Australia needs to lift its ambition above the safety net to sustainably lift wages across the economy.

“In particular, we welcome the Commission’s decision to delay the implementation of this increase for sectors that were smashed by the pandemic, including hospitality and aviation.

“To deliver sustained wages growth and higher productivity, we must lift record low business investment because that’s what drives companies to do new things, expand and innovate.

“There is no silver bullet – we need to address critical labour shortages, build up skills; make it easier to get back into the workforce and make it much easier to do business in Australia.

“To accelerate our economic momentum, we need to act now to ensure Australia is competitive with the rest of the world.

“And we must urgently end the deadlock on workplace relations to fix the enterprise bargaining system that the evidence makes clear sees workers earn more.

“A functioning enterprise bargaining system will lift productivity so employers can share the dividends of better performing workplaces with their teams through higher wages and better conditions.

“Many of the global economic headwinds are outside our control and that’s why we need to double down on the things we can control. This is how we get the economy to grow faster.

“We need a pathway to sustained wages growth fuelled by productivity.

“This decision will put pressure on many businesses so it must be matched with genuine reform and action to ease chronic labour shortages across the economy.

“Wage inflation is not the same as long term wages growth. Wage inflation without productivity would hold back the economy and put Australia’s record low unemployment rate at risk.’’


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