Finance Work Federal political battle over wages heats up

Federal political battle over wages heats up

living wage politics
The PM says Labor's plans for a living wage will force employers to lay off staff. Photo: AAP
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Prime Minister Scott Morrison has challenged Labor leader Bill Shorten to explain how he plans to drive up wages for low-paid workers, while again warning it could lead to job losses.

Pay has emerged as a key policy divide between the major parties ahead of the election after Mr Shorten hinted he might tweak industrial laws to promote a “living wage” if Labor wins government.

Mr Morrison argues the opposition hasn’t detailed how it would do this and claims interfering with the work of the independent wage umpire would force businesses to sack people.

“He’s either lying to Australians that he can do something about their wages because he hasn’t explained how he’s actually going to do it,” he said on Thursday.

“If he’s telling the truth, then he’s putting an enormous cost on small and family businesses that will force them to lay off staff.”

Business lobby group Restaurant and Catering Australia is calling for a freeze on the minimum wage for the second year running, ahead of the Fair Work Commission’s 2019 review.

Major employer groups have locked in behind the Prime Minister’s warning that “unsustainable” pay increases could cost jobs.

But unions want the commission to deliver a $43-a-week increase in the minimum wage because low-paid workers are living in poverty.

“Minimum wages should be set by the independent umpire, which is the Fair Work Commission,” Mr Morrison said in Melbourne on Friday.

Significantly, however, the Prime Minister has not ruled out supporting a modest increase for Australia’s lowest-paid workers.

The government’s formal position on wages will become public soon. Its  submission to the Fair Work Commission’s annual wage review must be lodged by Friday.

Business Council of Australia CEO Jennifer Westacott has also sounded the alarm for small businesses having to pay more in wages.

“I want people to have higher wages but I don’t want them to have higher wages that are then seen in lost jobs,” she told Sky News on Wednesday.

She said low-margin businesses could either sack people or pass on the cost to consumers in higher prices.

Mr Shorten has declared the coming election will be a referendum on wages and Labor is weighing up ways to encourage the Fair Work Commission to take more factors into account to ensure low-paid workers get a living wage. Unions define that as equating to 60 per cent of the national median wage.