Scott Morrison calls Anthony Albanese a ‘loose unit’ after calling for massive pay rises for millions of Australians which could see interest rates and unemployment soar
- Anthony Albanese said wages are expected to rise with an overall inflation rate of 5.1%
- Scott Morrison said his calls could increase inflation and drive up household bills
- Economists have warned that if wages rise, interest rates will soar
Scott Morrison has called Anthony Albanese a ‘loose unit’ on the economy after he shocked Australia by backing a massive 5.1 per cent rise in the minimum wage in off-the-cuff comments.
At a press conference on Tuesday, Mr Albanese said wages should “absolutely” keep up with the headline inflation rate of 5.1%.
The comment was immediately criticized by economists and business groups who fear such a wage hike could stoke inflation and drive up household bills even further.
This would mean that the Reserve Bank could be forced to raise interest rates more than otherwise, which would increase mortgage payments for millions.
It could also increase unemployment, as companies may find it too costly to employ so many people.
Speaking in Newcastle on Wednesday, Mr Morrison slammed his opponent’s comments and said he was not up to the task of leading the country.
“Mr Albanese showed yesterday that he is a complete loose unit on this stuff. He just runs away at the mouth,’ he said.
“It’s like he just opens his head and drops everything on the table.”
Mr Morrison declined to say what level of pay rise he favored – insisting instead that the Independent Fair Work Commission should decide without political pressure.
At a press conference on Tuesday, Mr Albanese said wages should ‘absolutely’ keep pace with the headline inflation rate of 5.1%
The Prime Minister accused Mr Albanese of “throwing oil on the fire of rising interest rates and the rising cost of living”.
He said it was “no wonder” the Labor leader had never held a financial portfolio in government or opposition.
“He’s like someone who works in a small business that he won’t let near the till and Australians shouldn’t let him near the till,” he said.
“Anthony Albanese says he wants wages to rise by 5.1% and he thinks Australians don’t know what the impact of that would be on their interest rates, on unemployment or on inflation and the Cost of life.
“He thinks Australians don’t understand the connection between these things. He thinks he can just say whatever he wants and you can have your cake and eat it. This is not the way to conduct a sensible, healthy and responsible economic policy.
Mr Morrison said fostering such a large wage increase would see Australia revert to the wage price spiral of the 1970s, when interest rates soared to 18%.
“If you vote Labour, [you will have] a leader who can make interest rates worse, who can make inflation worse,” he added.
Speaking in North Sydney, Mr Albanese maintained his position.
“We are talking about cleaners, we are talking about retail workers. We’re talking about people who are really struggling to get by.
“It is not enough to say thank you for what you have done to help us through the pandemic and then say that we want to reduce your real salary. That’s what Scott Morrison says.
The Australian Industry Group wants a “modest” 2% pay rise, fearing anything more could cripple small businesses.
Gareth Aird, head of the Australian economy at Commonwealth Bank, said wage growth above the Reserve Bank’s 3% inflation target range meant “rate hikes to bring it back down”.
“In short, wage growth of 5.1%, all things being equal, means higher interest rates than otherwise and pain befalls those with mortgages,” he said. he declares.
Prime Minister Scott Morrison welds during a visit to the Melt Prototyping and Innovation Accelerator in Newcastle on Wednesday
Core inflation – which removes highly volatile temporary price changes – was 3.7% in April.
Wage growth was 2.3% in the most recent data at the end of 2021.
The minimum wage in Australia is $20.33 per hour. It is reviewed annually, with a decision expected in June. Some 2.7 million Australians earn minimum wage.
The Coalition believes that the best way to accelerate wage increases is to reduce unemployment – currently at just 4%.
Liberal Senator Anne Ruston said: ‘About a million people in the last two months of last year changed jobs and they changed jobs for a pay raise of between 8 and 10 per cent.
“That only happens when unemployment is exceptionally low.”