Josh Frydenberg (Kooyong, Liberal Party, Treasurer) Share this | Hansard source

Real wages obviously take inflation into account. We have seen modest inflation, so real wages are at their 10-year average. The Leader of the Opposition specifically refers to the fact that we will see mid this year, according to the budget papers, inflation at around 3½ per cent. That is because we saw inflation go negative in the year prior, for the first time in 60 years, as we put in place emergency measures like free child care. What the Leader of the Opposition fails to acknowledge is that the best way to drive up wages, real or nominal, is to blow up the unemployment rate. It is under this government, this coalition, that the unemployment rate today is lower than when we came to government. At 5.6 per cent, the unemployment rate is lower than when we came to government, even after the biggest economic shock since the Great Depression.

In last night's budget we indicated that we are seeking to drive the unemployment rate down even further, from 5.6 per cent down to 5.1 per cent—before the pandemic hit—and even lower. As the RBA and Treasury have said, in order to drive an acceleration in wages you need to have an unemployment rate with a four in front of it. In last night's budget papers, Treasury printed a forecast for the unemployment rate to go under five by the end of next year. Our policies are for more investment in skills, more investment in infrastructure and more investment through tax relief while helping to drive more Australians into jobs. That is our record and that is what we will defend every day of the week.

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