3.7 per cent<\/a>.<\/p>\nInflation is expected to surge upwards of five per cent due to oil supply constraints, which have caused petrol and diesel prices to surge.<\/p>\n
Capital Economics head of APAC Marcel Thieliant warned of catastrophic consequences for the economy if Labor\u2019s wishes are greenlit.<\/p>\n
\u201cIf they’re calling for a hike of above inflation this year, that would be disastrous because on our forecast we have inflation averaging five per cent this year,\u201d he told Business Now.<\/p>\n
\u201cIf they want to beat that, they need to give an extraordinarily large minimum wage hike that would add to this inflationary spiral that we’re now seeing.\u201d<\/p>\n
The call for an above inflation pay rise comes as Australia\u2019s productivity growth remains at one per cent per year.<\/p>\n
Mr Thieliant said this made offering a minimum wage increases like the one Labor was calling for challenging.<\/p>\n
\u201cEven if you use last year’s (inflation) measure (of 3.8 per cent), it’s a bit difficult to justify an above inflation pay hike because productivity growth is still very weak,\u201d he said.<\/p>\n
\u201cPolitically, obviously they have no choice because people will scream if you don’t give an above inflation pay hike.<\/p>\n
\u201cBut in terms of the underlying inflationary stance, restraint would be the right decision.\u201d<\/p>\n
![\"\u2018Astonishing\u2019:](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/2dd2f6c94483630926b022c5b1f4da70.jpeg\")
<\/p>\n
Labor has not given a specific wage increase recommendation, but only said it should exceed inflation.<\/p>\n
Employment Minister Amanda Rishworth and Treasurer Jim Chalmers issued a joint statement on Thursday saying the wage rises would help Australians battling myriad economic challenges.<\/p>\n
\u201cAn economically sustainable real wage increase is consistent with underlying inflation returning to the Reserve Bank of Australia\u2019s (RBA) target band in 2026-27 and will provide further relief to lower income workers who are still doing it tough,\u201d the statement said.<\/p>\n
\u201cConflict in the Middle East is compounding global economic uncertainty, and putting pressure on fuel prices, inflation and on family budgets.\u201d<\/p>\n
Discord has erupted between unions and employers over what an appropriate pay rise would be.<\/p>\n
The Australian Council of Trade Unions has pushed for a five per cent lift in the minimum wage.<\/p>\n
This would increase the minimum wage to $26.19 per hour and the annual full-time rate by $2,465 to $51,761.<\/p>\n
Employers have called for a more modest wage increase and warned anything higher than inflation could add to price pressures.<\/p>\n
The Australian Chamber of Commerce and Industry backed a 3.5 per cent increase while the Australian Restaurant and Caf\u00e9 Association proposed a pay bump between 3.5 per cent and four per cent.<\/p>\n
ACCI\u2019s chief executive Andrew McKellar said the ACTU\u2019s proposed five per cent bump was \u201ccompletely unjustified\u201d.<\/p>\n
The Fair Work Commission last year lifted the minimum wage by 3.5 per cent when inflation was around three per cent.<\/p>\n
Australians were delivered higher wage bumps in previous years.<\/p>\n
Fair Work delivered a 3.75 per cent bump in 2024, a 5.75 per cent increase in 2023 and a 4.6 per cent hike in 2022.<\/p>\n","protected":false},"excerpt":{"rendered":"Labor\u2019s proposal for above inflation pay rises could be \u201cdisastrous\u201d for the economy as prices are expected to…\n","protected":false},"author":2,"featured_media":566487,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,9567,21450,164,20756,5465,167272,101858,7054,183],"class_list":["post-566486","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-central-bank","tag-cpi","tag-economy","tag-fair-work-commission","tag-inflation","tag-marcel-thieliant","tag-minimum-wage","tag-rba","tag-reserve-bank-of-australia"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/566486","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=566486"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/566486\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/566487"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=566486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=566486"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=566486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}