Australia’s new PM supports wage hike to fight inflation

On Friday, Australia’s new center-left Labor government recommended hiking the minimum wage to help households struggling with rising energy costs and consumer price inflation.

Prime Minister Anthony Albanese, who took office last week, said his government has filed an application with the independent wage-setting agency to assist improve the pay of the lowest-paid workers from A$20.33 ($14.77) an hour.

“Minimum wage workers deserve a raise,” Albanese remarked on Twitter. “The rising cost of living is putting a strain on family budgets. And these costs are more difficult to satisfy as a result of the previous government’s deliberate determination to keep wages low for a decade.”

The minimum wage will be decided by the Fair Work Commission in the coming weeks, affecting nearly 2 million workers, however the government can make a suggestion on the size of the award.

The government does not want wages to “go backwards for anyone,” according to Employment Minister Tony Burke, “but this is especially severe for low income people.”

Real earnings are in the red because inflation is increasing twice as fast as wages.

As demand for energy grows with colder weather, the new administration is combating a jump in domestic wholesale costs of electricity and gas.

Albanese vowed during the election campaign that he would support a 5.1 percent pay increase to keep up with inflation.

Amid a significant spike in living costs, statistics released on Wednesday showed Australia’s gross domestic product climbed 0.8 percent in the March quarter, above market expectations and clearing the stage for future Reserve Bank of Australia interest rate hikes to combat inflation.

In a survey released on Friday, economists surveyed by media predicted that the RBA will hike rates by 25 basis points at its June policy meeting next week, with some forecasting a 40 basis point increase to 0.75 percent.

Markets are also anticipating a rise.

 

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