Q: The RBA has said that real wages won’t increase until the end of 2023, with unemployment reaching almost full employment in that time and businesses only just starting to offer wage rises, what are Australians supposed to do in the next 18 months when the RBA is saying that real wages won’t increase in that time, how do they pay for things?
They won’t be able to pay for things if inflation goes even higher and interest rates go even higher. That is why what Anthony Albanese is speculating on and running off at the mouth on, would only make that situation worse. It would only make it worse.
Labor would make the very issues you’re highlighting worse under what they are proposing.
(A journalist repeats the question.)
Q: Is it correct to say then that you – any workers will not see a real wage increase until that inflation number comes down? And would your government do anything to … look at trying to ease those global factors that you keep saying are causing Australia’s higher inflation level, particularly around supply chains?
… There are two things driving those inflation numbers at the moment. One is, of course, what’s happening with the – there’s a range of immediate factors. Let’s call them that. There is the war in the Ukraine, there is the shutdown in China because of Covid, and also we will continue to see, particularly this quarter, and perhaps the next quarter, the impact of the floods in Australia and what that means for fruit and veg prices and we have seen that when there is cyclones and other disasters in parts of the country in the past.
That will put pressure on prices. And they are things that occur well outside Australia’s control. The structural factors that are driving inflation are about those supply chain pressures that we are seeing which is a lag and a direct consequence of the pandemic.
And that’s why what we are talking about here, advanced manufacturing, linking up supply chain in Australia, critical supply chain work, whether it be in the critical rare earth minerals and so on – that’s what helps moving the supply chain efficiently.
On top of that, it’s ensuring that we keep getting people into jobs, keep that pressure in the system, which leads to sustainable wage rises, supported by businesses that stay in business.
I mean, this is one of the most difficult times with the pressures that are on the global economy and hence the Australian economy, that we have seen in a very long time.
And how we manage that must be sensitive, must be responsible, must be disciplined.
Now, what we saw yesterday from Mr Anthony Albanese, what we saw yesterday from Mr Albanese was loose. It was ill-considered.
It showed a lack of understanding of the relationship between wages and inflation, and interest rates. If you want your interest rates to be skyrocketing, as a result of what Anthony Albanese is suggesting, well, he’s your guy.
But what I’m saying, is Anthony Albanese will make it worse.