The Federal Budget has lived up to expectations with a cynical grab bag of pre-election sweets aimed at getting the Morrison Government re-elected.
But the elephant in the room – stagnant wage growth – has not been addressed, with all the evidence suggesting Australian workers battling with the cost of living will go backwards again this year.
AWU ³Ô¹ÏÍøÕ¾ Secretary Daniel Walton says the average worker’s income went backwards by $800 in real terms in 2021 and that trend looks set to continue.
“Treasurer Josh Frydenberg could have taken significant steps with his Budget to help Australian workers, but with inflation surging and no real plan for wage growth he has missed the boat,” Mr Walton says.
“It’s all well and good spending big on one-off election bribes, but the Budget failed to provide any avenue for lasting relief to workers and families dealing with the spiralling cost of living.
“The Government’s own projections show workers’ wages will go backwards in the first six months of this financial year by an average of $500 in real terms.”
Budget headline items included an extra $420 added to this year’s low and middle income tax offset, a one-off payment of $250 to six million eligible pensioners, welfare recipients, and others, and a six-month 22c cut to fuel excise.
But Mr Walton says these are stop-gap measures produced in the lead-up to an election, to hide the fact that the Morrison Government has presided over almost a decade of stagnant wage growth.
“Last year inflation grew by 3.8%, compared with just 1.7% for wages, and the decline in real wages has continued this year, with inflation growing 1.25 percentage points faster than wages,” he says.
“Wage growth is now tipped to increase from 2.75 per cent in 2021-22 to 3.25 per cent in 2022-23. That is an increase of just half a per cent despite major increases in the cost of living.”
Part of the problem is the rubbery figures used to concoct the Budget.
“The Reserve Bank and the Federal Treasury have constantly overestimated the growth in wages since 2012, regularly forecasting a lift in wages that has never materialised,” he said.
“Every budget this Government has handed down has predicted wage growth just around the corner, and every year workers have instead seen record low wage growth.
“Last week Reserve Bank governor Phil Lowe said annual inflation will ‘probably’ hit 4.5 per cent, but some private sector economists say inflation could reach 5 per cent by the middle of the year.
“That would see real wages falling by 2.5 percentage points, the biggest fall since the introduction of the GST.”
Mr Walton says rather than taking sensible steps to help workers, the Morrison Government is content to watch as Australian workers see their incomes go backwards in real terms, year after year.
“The Budget fails to acknowledge a decade of historically low wage growth, and previous rosy predictions of wage increases by Morrison Government that have never materialised.
“As it stands there is no sign those increases will ever appear.”
