Election 2022 live updates: Barnaby Joyce says ‘what China will respect is strength’ in National Press Club address
Barnaby #Barnaby
Hello good people. If you are plugged in to the hustings today you’ll know the conversation is about wages. Yesterday, Anthony Albanese said he would support a wage increase for Australia’s lowest paid workers that would keep pace with inflation.
It’s a simple message, Labor favours real wage increases, not real wage cuts – although it was strange that the Labor leader seemed to suggest in an early radio interview on Tuesday the level of increase was broadly up to the ACTU but then warmed up to an increase of 5% at a press conference later in the day.
Scott Morrison has a more complicated position on this issue.
Sorry – I should be clearer, the prime minister has a very simple political message, which is that Albanese is an idiot who will crash the economy, a message that is shared on high rotation regardless of the specifics or merits of any proposal.
But back to the substance of the thing.
Morrison says the political class shouldn’t have views about wage fixation because the Fair Work Commission (FWC) is independent from government and that independence must be respected.
But in the same breath, he also suggests a 5% increase will make the sky fall in – a point that very obviously undercuts his first argument.
If the PM genuinely believes politicians should have no views about wages and leave this all to the FWC, then best to maintain that view, lest one be seen as trying to influence a process Morrison says politicians shouldn’t influence.
Just a couple of general observations. I am old enough to remember the inflationary pressure that existed in the economy before the inflation dragon was allegedly slain.
So I remember the old debates where business and other institutional interests in the economy screamed blue murder about giving employees a wage increase because that would feed inflation and help jack up interest rates – which was a narrative Australians became conditioned to accept.
I even remember the Accord – a compact between the Hawke government and the union movement where trade unions agreed to temper wage demands in return for a full court press by the government to control inflation.
I studied these developments in high school economics, before spending the opening years of my journalism career at the Australian Financial Review, where these issues were covered minutely.
But given inflation has not been a risk for governments or central banks to manage for years, there will be many Australians who don’t remember the olden times and will not have been conditioned by those debates in the way that GenXers like myself, and the Boomers before us, were.
It’s very obvious Morrison is trying to summon an old school debate on this question, and his efforts will be backed in by the same business groups that have always preferred higher profits and dividends than employee compensation. And of course, substantively, it is important to factor in the inflationary pressure associated with wage increases otherwise better compensation becomes zero sum – what goes in one pocket comes out the other.
But I wonder whether Morrison’s political pearl-clutching about inflation has the same potency for a generation that has never experienced inflation, subsists in a gig economy with next to no employment certainty, and has zero prospect of ever owning their own home unless they have access to the bank of mum and dad. The workers of the present generation have only ever known sluggish wages growth.
I suspect a simpler Albanese message, that we favour real wages growth, is both salient, and easier to communicate.
But Morrison cranking up the inflation dragon, backed by his amplifiers and institutional interests, is obviously a real and present threat for the Labor campaign to manage.