Workplace Relations Minister Tony Burke has played down the significance of FWC president Adam Hatcher questioning whether a perceived big increase in the minimum wage could contribute to further increases in interest rates.
A senior Treasury Department official says the Federal Budget's forecast that inflation will drop back to 2% to 3% by mid-2025 assumes the FWC will make a minimum wage ruling that "broadly proxies" last year's increases.
Private sector rates of pay increased to 3.8% annually in the March quarter, up from 3.6% in the previous three-month period, according to the ABS, but relatively weak public sector rises have restricted the economy-wide movement to 3.6% in trend terms, about half the rate of inflation.
The AiG says the FWC should take into account the Budget's substantial cost-of-living relief for the low-paid in granting an increase no higher than 3.8% in this year's minimum wage case, while the Albanese Government says there are "no signs" of a wage-price spiral and reiterates its view that the real wages of low-paid workers should not "go backwards".
Wage growth will exceed inflation from early next year and beat prices by 0.75 percentage points by mid-year, according to the Albanese Government's second Federal Budget.
The RBA is continuing to warn about the dangers of a wage-price spiral, saying the chances of it have declined, but could rise again if the FWC awards a "large" minimum rise this year or government employers ease or drop pay caps.
NSW Opposition Leader Chris Minns has hedged over whether his pledge to scrap the State's public sector wage cap will lead to higher pay increases than those awarded under the Perrottet Government.
Multi-year enterprise agreements, flaws in the "standard" Wage Price Index measure and public sector pay caps partially explain recent low wages growth, which would otherwise have been up to one percentage point higher last year, according to new university analysis.
Federal Treasurer Jim Chalmers has today argued for "responsible and sustainable" wage increases to ease cost of living pressures, as he emerged from an address to the ACTU's national executive in Melbourne.
Enterprise agreements filed with the FWC in the fortnight to October 21 paid average annualised wage increases of 3.5%, substantially outpacing the 2.8% rises in DEWR's data for June quarter agreements but well below the 7.3% rate of consumer price inflation.
