LATEST NEWS

national news 7sd pageheader 2019

Election war of words rages over wages

Scott Morrison has hit out at the federal opposition's minimum wage rise push, as Anthony Albanese flagged a Labor government would take its time to draft its submission to the industrial umpire.

Mr Albanese said he would support a 5.1 per cent wage increase in line with the highest inflation figure in two decades, but indicated the mechanism by which a Labor government would seek the rise would be determined in coming weeks.

The prime minister branded Mr Albanese's statement as "reckless".

"We all want to see wages increase but I don't want to see reckless behaviour in how the process should work and this is where Mr Albanese has failed," he told reporters in Tasmania.

"He knows he got that wrong. He knows he acted recklessly, and he's been trying to cover his tracks ever since."

Mr Morrison has not put a figure on what an appropriate wage rise would be, but warned a rise and its flow-through effect on other wages could trigger higher inflation.

"Any potential support you might have got in wages would be clawed back in even higher interest rates and even higher inflation," he said.

"That's not how you manage an economy."

Treasurer Josh Frydenberg said the independent umpire would make its decision with a complete understanding of the economic consequences.

"When it comes to the Labor Party's commitment to a 5.1 per cent increase in wages, it was a thought bubble," he said.

"It goes against the practice of both sides of politics to leave these decisions to the independent Fair Work Commission."

Mr Albanese hit back, saying his message had been consistent in that he supports a real wage increase and the government couldn't go over the top of the commission.

"There is a cost of living of everything is going up except for wages. The idea that we would support a real wage cut for people on the minimum wage is an extraordinary claim," he told reporters in Gladstone.

"What I have said consistently ... is if the Fair Work Commission, that operates independently of government, makes a decision to not cut real wages and keep up with the cost of living, that's something that I would welcome."

Mr Albanese accused the government of constantly spruiking a strong economy, but acting as if "the sky is falling in" when Labor supports a $1 an hour increase to the minimum wage.

He said a Labor government would have until June 7 to draft a comprehensive submission to the industrial umpire.

Labor's campaign spokesman Jason Clare accused the prime minister of being out of touch with the reality of living costs.

"I say to Scott Morrison, you've got a screw loose if you don't think people are struggling to pay the bills at the moment," he said.

The Australian Council of Trade Unions wants the Fair Work Commission to increase the minimum hourly rate by 5.5 per cent to $21.35 while business proposes a three per cent lift.

ACTU secretary Sally McManus warned of more industrial action if employers refuse to increase wages amid rising profits and the highest start-up and survival rates in a decade.

"Businesses are not just recovering, they are recovering very well," she told ABC radio on Thursday.

"If employers continue to insist on real wage cuts for workers, and through negotiations they don't move off that, that's what brings about strikes. People go on strike when they have no other option."

But the head of the Australian Chamber of Commerce and Industry says the cost of doing business has also increased, citing Australian Bureau of Statistics data.

"We've seen in the last three months ... that three out of five businesses have been facing a surge in costs," Andrew McKellar told the ABC.

"So businesses are facing a very tough time at the moment."

© AAP 2022