Hundreds of thousands of Australians are bracing for a spike in their interest rates when their fixed rate mortgages end this year.

Finance Minister Katy Gallagher says 20 per cent of mortgage holders – some 660,000 households – will come off fixed rates in 2023.

Census data shows there are 3.3 million Australian households that still have a mortgage.

But Senator Gallagher would not be drawn on whether the government would back the CFMEU pushing for “significant” wage rises.

Incoming national secretary Zach Smith told The Australian the Reserve Bank had been “clobbering” workers with its interest rate rises.

The finance minister said it was a matter for the unions and the employers.

“It’s very unsurprising that a union would be arguing for better wages for its workers,” she told ABC radio.

“I back effective bargaining, that is, the employer and the unions and the employees sit down and they negotiate what’s possible.”

Senator Gallagher added that the government’s policy had already led to wage growth.

Treasurer Jim Chalmers said he was using the May budget to prop up Australia’s most vulnerable people.

Dr Chalmers flagged relief, saying he was working with Social Services Minister Amanda Rishworth on new measures.

“If you want to shift the needle on poverty and disadvantage – and it’s such a big, national challenge – the best way to start is to find out where those challenges are most acute,” he said.

The treasurer is also using a new essay to outline his economic manifesto, flagging a rethink of capitalism to a more “values-based” model.

He says powerful corporations and businesses have an interest in keeping the financial system status quo in place.

“One reason we became more vulnerable to economic uncertainty and upheaval by 2020 is that for much of the past decade leaders failed to do the thinking that would have given us a new plan in the intervening years,” he wrote in The Monthly. 

“Economic inclusion is fundamental to the health of democracies and the safety of nations.

“This is not just the beginnings of a new economic model, it is democratic reform.”

Channelling Ronald Regan’s assertion that, “the nine most terrifying words in the English language were ‘I’m from the government and I’m here to help’, Shadow treasurer Angus Taylor called Dr Chalmers proposition “left-wing populist economics”.

“The treasurer believes his proposal for activist governments – running the economy from the top with him at the centre – is a solution to the challenges Australia faces today,” he said.

Mr Taylor said the reform would mark “a frightening shift to big government corporatism”.

“Labor believes that government interfering in your life is a good thing because the government is full of smarter, better informed and better motivated people than the average Australian.”

– AAP