Rate rise brought to you by the ACTU
6 Jun 2023|
Last week’s decision to increase award wages by 5.75 per cent has forced the hand of the Reserve Bank, with the board delivering a further 0.25 per cent increase in the cash rate today.
“If last week’s wage increase was brought to you by the ACTU, so too is today’s rate rise,” ACCI chief executive Andrew McKellar said.
“The result of the ACTU’s irresponsible wages claim could not be clearer – wages growth not supported by productivity gains risks entrenching inflationary expectations and inflationary pressures.
“The Reserve Bank’s decision to hike rates another 0.25 per cent will come as a blow to millions of households and small businesses across the country.
“After last week’s Fair Work Commission decision, it has become increasingly difficult for the RBA to return inflation to target, with the bank indicating that further monetary tightening is likely.
“As the Reserve Bank has acknowledged in its statement today, unit labour costs are rising briskly, while productivity growth remains anaemic. However, as Governor Lowe warned last week, the recent pickup in wages growth without corresponding increases in productivity cannot be sustained.
“Despite the Fair Work Commission’s attempts to downplay the implications of its award wages decision on inflation, the risks of broader benchmarking in other wage agreements through the rest of the labour force must be recognised.
“This failure to exercise responsibility risks consigning Australia to more economic pain – higher prices, mounting interest rates and fewer jobs.