“We know that inflation is not driven by high wage growth in Australia because we don’t have high wage growth in Australia,” Burke said, noting wages overall increased 3.3 per cent in the December quarter despite“In terms of the impact across the economy, the concept that somehow it would be a driver of inflation is not true.
“That doesn’t mean there isn’t a link between wages and inflation. There is. It’s just a question of what is a justifiable, reasonable level of wages growth,” Koukoulas said, adding the minimum wage decision directly affected only a small part of the workforce. “If the Fair Work Commission was to determine that people not go backwards, would I welcome that? Absolutely,” he said.
The federal government is heading towards a showdown with business, which wants a much lower increase. The Australian Chamber of Commerce and Industry has recommended a 3.5 per cent wage rise for the year ahead, half the rate beingACCI head Andrew McKellar said a 3.5 per cent rise, which would amount to a real wage cut, was necessary to keep inflation under control, small businesses viable and people employed.