The peak body for unions has made a drastic move to secure higher wages and prevent future interest rate rises, a top economist said.<\/p>\n
The Australian Council of Trade Unions sparked alarm after pulling a survey of inflation expectations the Reserve Bank of Australia relies on for rate decisions.<\/p>\n
It follows the central bank arguing that union long-term expectations of inflation were too high.<\/p>\n
Inflation expectations can influence wage demands, which the major unions have massive sway over.<\/p>\n
These wage increases can then pressure inflation and force the RBA to lift rates.<\/p>\n
EQ Economics managing director Warren Hogan said the ACTU was \u201cthrowing the toys out of the pram\u201d and creating a \u201cblind spot\u201d for the RBA.<\/p>\n
\u201cWhat the unions are trying to do is entirely in their own interests \u2026 and that is have high inflation expectations to support high-wage claims at the industrial level,\u201d Mr Hogan told AM Agenda.<\/p>\n
\u201cBut they don’t want to be seen as having those high inflation expectations as a reason for the RBA to put up interest rates.<\/p>\n
\u201cThe one thing that this leadership of the ACTU has been is extremely aggressive in the way they’ve campaigned against rate hikes at any point in time.\u201d<\/p>\n
In the minutes of the RBA\u2019s June meeting, the central bank noted union expectations were well outside the RBA\u2019s 2-3 per cent band.<\/p>\n
\u201cLonger-term measures had remained consistent with achieving the inflation target, although unions\u2019 long-term inflation expectations were an exception, having picked up sharply in May, as they had in 2022,\u201d the minutes said.<\/p>\n
The unions\u2019 long-term expectations of inflation are up around 3.5 per cent.<\/p>\n
This is also above forecasts of market economists who predict inflation will sit around 2.5 per cent in the long term.<\/p>\n
An ACTU spokesperson said the council had scrapped the survey amid concerns it was not providing the RBA the best understanding of expectations.<\/p>\n
\u201cUnions negotiate wage outcomes for a very significant proportion of the workforce and many factors feed into wage claims as well as wage outcomes,\u201d the spokesperson said.<\/p>\n
\u201cIf the RBA is using this information in their decision-making, it is imperative a better methodology be developed and we are committed to working with the RBA to achieve this.\u201d<\/p>\n
Mr Hogan said the ACTU withholding inflation expectations came as real wages declined in recent years.<\/p>\n
\u201cIt really just denies them information that will reveal itself when those wage negotiations are settled,\u201d he said.<\/p>\n
\u201cThis is all a much hotter space than it has been for decades because we’re seeing real wages go backwards because of this inflation that we can’t get rid of.<\/p>\n
\u201cAnd, of course, real wages are what motivates unions to take industrial action and make bigger wage claims.\u201d<\/p>\n
Recent figures from the Australian Bureau of Statistics revealed wages grew 3.2 per cent over the past year, but inflation outpaced this at 3.8 per cent.<\/p>\n
Meanwhile, the RBA has lifted the cash rate three times since the beginning of 2026 and warned it may have to raise again while inflation remains elevated.<\/p>\n
Read related topics:Inflation<\/a>Interest Rates <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The peak body for unions has made a drastic move to secure higher wages and prevent future interest…\n","protected":false},"author":2,"featured_media":867703,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[394692,436610,8288,10968,236544,25471,418028,436621,436648,436626,436646,399157,436606,436643,436603,62961,151881,436607,436611,436608,436613,436639,64,63,436605,179040,99,32092,436636,56957,128547,436625,155133,16170,164,31008,5298,436632,436618,436622,436057,84868,5465,55595,436642,9392,5626,436614,436635,436633,436604,436640,13809,394669,436644,20246,282545,174614,14825,7054,47739,436620,380174,378904,11499,386386,436612,383252,436617,377055,436627,245970,402641,14822,387211,436637,436641,387778,436628,417905,383448,390512,436615,391979,377403,402668,379618,389073,387765,378879,214758,378922,436630,436634,436616,436638,431939,436619,436609,436624,394691,6618,115835,436623,436631,48154,119001,436647,436645,436629,169135,4848,90107],"class_list":["post-867702","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-s-2-3","tag-s-june-meeting","tag-8288","tag-10968","tag-3-2","tag-3-5","tag-3-8","tag-a-blind-spot","tag-a-better-methodology","tag-a-drastic-move","tag-a-much-hotter-space","tag-a-reason","tag-a-survey","tag-a-top-economist","tag-a-very-significant-proportion","tag-actu","tag-alarm","tag-am-agenda","tag-an-actu-spokesperson","tag-an-exception","tag-any-point","tag-around-2-5","tag-au","tag-australia","tag-bigger-wage-claims","tag-blind-spot","tag-business","tag-cent","tag-cent-band","tag-concerns","tag-criticism","tag-crucial-data","tag-decades","tag-economist","tag-economy","tag-expectations","tag-forecasts","tag-future-interest-rate-rises","tag-high-inflation-expectations","tag-high-wage-claims","tag-higher-wages","tag-industrial-action","tag-inflation","tag-inflation-expectations","tag-inflation-expectations-data","tag-information","tag-interest-rates","tag-long-term-inflation-expectations","tag-long-term-expectations","tag-longer-term-measures","tag-many-factors","tag-market-economists","tag-massive","tag-mr-hogan","tag-newswire-john-appleyard-eq-economics-managing-director-warren-hogan","tag-picture","tag-rate-decisions","tag-rate-hikes","tag-rates","tag-rba","tag-real-wages","tag-recent-figures","tag-recent-years","tag-snapp-business","tag-statistics","tag-the-actu","tag-the-actu-withholding-inflation-expectations","tag-the-australian-bureau","tag-the-australian-council","tag-the-beginning","tag-the-best-understanding","tag-the-body","tag-the-cash-rate","tag-the-central-bank","tag-the-council","tag-the-industrial-level","tag-the-inflation-target","tag-the-long-term","tag-the-major-unions","tag-the-minutes","tag-the-one-thing","tag-the-past-year","tag-the-peak-body","tag-the-pram","tag-the-rba","tag-the-reserve-bank","tag-the-spokesperson","tag-the-survey","tag-the-toys","tag-the-unions","tag-the-way","tag-the-workforce","tag-their-decision-making","tag-their-own-interests","tag-these-wage-increases","tag-this-inflation","tag-this-information","tag-this-leadership","tag-those-high-inflation-expectations","tag-those-wage-negotiations","tag-three-times","tag-time","tag-trade-unions","tag-union-expectations","tag-union-long-term-expectations","tag-unions","tag-wage","tag-wage-claims","tag-wage-demands","tag-wage-outcomes","tag-wage-price-index","tag-wages","tag-warren-hogan"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/867702","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=867702"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/867702\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/867703"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=867702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=867702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=867702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}