Economists have raised a “key concern” overlooked during Tuesday’s interest rate announcement, as a report from the Reserve Bank outlined a dire future for Australian taxpayers.\u00a0<\/p>\n
The Reserve Bank of Australia\u2019s\u00a0latest string of forecasts included\u00a0estimates real wages growth would not turn positive until mid-2027.\u00a0<\/p>\n
Bran Black, Business Council of Australia Chief Executive, told Sky News real wages was of major concern for\u00a0workers and the private sector.\u00a0<\/p>\n
\u201cThe key concern that we\u2019ve got, more than anything else, is real wages, that\u2019s\u00a0ultimately how we all get ahead,\u201d he said on Thursday morning.\u00a0\u00a0<\/p>\n
\u201cThe challenge we have at the moment is that we do need to make sure we are putting more controls in place with respect to government spending, but at the same time and, as Reserve Bank Governor Michele Bullock has said, the key thing we\u2019ve got to do here is drive productivity.\u00a0<\/p>\n
\u201cIt\u2019s\u00a0productivity that ultimately lifts real wages and that means that you are putting less pressure on inflation,\u00a0so in this budget we\u2019re looking for initiatives and measures that will put downward pressure on that spending.\u201d\u00a0<\/p>\n
Earlier in the week, Deloitte Economics Partner Stephen Smith said the government\u2019s focus should be on lifting the economy\u2019s capacity.\u00a0\u00a0<\/p>\n
\u201cThe RBA has lowered its medium-term growth forecast for the economy to 1.6 per cent and is now assuming real wages decline for the next 12 months, while household disposal income is predicted to only grow by 1.3 per cent by 2028,\u201d he said.\u00a0<\/p>\n
\u201cThis is not ambition for Australia. If this is\u00a0really as\u00a0good as it gets for economic growth, then Australia has bigger problems than an interest rate rise.\u00a0<\/p>\n
\u201cToday\u2019s decision will increase the pressure on the May Budget to deliver meaningful reform that boosts investment, drives productivity, and delivers an economy that can grow faster without inflationary pressures.\u201d\u00a0<\/p>\n
Speaking on the ABC\u2019s 7.30, Jim Chalmers said Labor had \u201cturned real wages around\u201d during its time in office.\u00a0\u00a0<\/p>\n
\u201cFirst of all,\u00a0we\u2019ve\u00a0had 2\u00a0years of real\u00a0wages\u00a0growth. Real wages were plummeting when we came to\u00a0office,\u00a0we\u2019ve\u00a0turned that around,\u201d he said.\u00a0<\/p>\n
\u201cBut obviously when you\u2019ve got inflation higher than you like, that has implications for real wages.\u00a0We\u2019re\u00a0up front about that as well, but 2\u00a0years of\u00a0relatively strong\u00a0real wages growth.\u00a0<\/p>\n
\u201cI\u2019d say to people who are thinking about the next year or two, they will get a tax cut from this Labor government that our political opponents didn\u2019t want them to get.\u00a0\u00a0<\/p>\n
\u201cOur record on wages, the gender pay gap and the like, has been much, much stronger than the record of the government that we replaced. And that\u2019s because we know that decent wages are part of the solution to the cost-of-living pressures, not part of the problem.\u201d\u00a0<\/p>\n