James Stevens (Sturt, Liberal Party) Share this | Hansard source

This is a confusing motion. It probably needs to be updated. I note that notice was given on 26 July. In its first line, the motion says:

(1) notes that:

(a) the Fair Work Commission has delivered a 5.2 per cent rise in the minimum wage, slightly above headline inflation …

Well, inflation is at 6.1 per cent. The June quarter's annualised inflation figure was 6.1 per cent. So someone got a little bit overexcited and thought they would be moving a motion to celebrate the achievement of growing real wages for those on the minimum wage. Patently, that's not what is occurring. If inflation is higher than the increase that is being put in place then the real wages of the lowest paid in our society, those on the minimum wage, are actually decreasing. That's simple macroeconomics that I don't think can be disputed. I note that notice of the motion was given on 26 July. It was actually the next day—would you believe it?—that the updated figures were released. Maybe hanging back just one day to check that you were right about that before moving this could have saved the embarrassment. We now have a situation where the mover's not choosing to move an amendment to the motion to make it accurate. Nonetheless, it's not my motion, so that's not my problem. I simply start by pointing out that it is a simple reality that with inflation running at 6.1 per cent in the June quarter—and, unfortunately, the signs are, and the Reserve Bank are indicating that they think, that inflation will potentially be climbing into the 7s—5.2 per cent will not result in a real increase for those earning the minimum wage.

I note also that the motion says:

(3) congratulates the:

…    …    …

(b) Government on its position that it does not want to see Australian workers go backwards …

Well, it's good if that's their position, but they're not achieving it. Australian workers on the minimum wage are going backwards, for exactly the same reason: that inflation is running higher than the increase that was achieved. That's regrettable and it makes the motion inaccurate, unfortunately.

Nonetheless, I don't think there's a debate about the importance of growing real wages. Of course that's what we want to see. We want to see an economy that's growing, and we want to see the growth of that economy shared very much between labour and capital. That's the most important social compact that we have got in our economy: that we all see the benefit and a dividend of the economy growing and, particularly where there's opportunity for productivity increases, that that is flowing through to increases in real wages.

This underscores the very difficult position we're in right now, where inflation is galloping ahead rapidly and there is really no response, at this stage, coming from the government. It will be interesting to see what they'll need to do in the upcoming October budget to dramatically address runaway inflation. With the government not doing anything, we're only going to see the Reserve Bank doing the majority of heavy lifting, which will be through higher interest rates. We don't want to see interest rates any higher than they need to be, and we don't want to see the destruction of people's finances, whether that be through wage reductions—like those we will see with low-paid workers because of inflation versus Fair Work Commission decisions on increases, resulting in negative growth in real wages—or through other impacts of inflation destroying the value of self-funded retirees' savings and the savings of all retired Australians.

Inflation is an enormous challenge to be addressed, and this motion did, when it was relevant, seek to make important points about the significance of increasing real wages. I'm in this building to be a part of growing the wealth of all Australians, and real wages growth is a very important part of that. This government is not achieving that. That is regrettable. They hold the policy levers to do that. Of course, they will have a budget coming out in a little over a month's time. That's the real challenge: to see what the government are going to do to arrest runaway inflation, because we can't have wages chasing inflation rates of seven, eight or nine per cent or whatever they may get to, and we don't want the Reserve Bank being the only people pulling policy levers to address inflation. On the fiscal side, there's a lot that can be done by the government.

This motion, and the fact that it is now so out of date and therefore incorrect, is the best example of how vital the job of the Treasurer is: to do something meaningful in the upcoming budget to achieve an increase in real wages rather than say they're going to do it and, when figures are subsequently released, find out that in fact they have not.

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