Another rise in the cost of living is the last thing Australian workers need, but it is exactly what the Morrison government has delivered.
The Reserve Bank’s decision to raise the cash rate by 25 points to 0.35 per cent adds further pressure to working families already struggling with flatlining wages and the rise in prices on everyday essentials like food, power, petrol and any number of staple products households rely on.
As the Morrison government watched inflation vault to over 5%, its unwillingness to increase wages and keep workers ahead of cost-of-living pressures has left workers in a financial fix.
Australian Unions have warned the Government about cost-of-living pressures pushing Australian workers to the edge and that action needed to be taken.
Yet Scott Morrison chooses not to support a pay rise for a quarter of Australian workers through the Annual Wage Review. He also refuses to support the wage case being run by aged care workers or do the work to address the insecure work crisis.
These are practical steps that the Federal Government could take to generate wage growth and help end the cost-of-living crisis.
ACTU Secretary, Sally McManus, is adamant the Morrison government had the opportunity to deal with the cost-of-living crisis but chose to do nothing.
“This rate rise will only increase the pressure on working people who have been struggling for years to keep up with rising costs of living while their wages go backwards.
“This rate rise will hit working people hard because Scott Morrison has refused to act to support Australian workers getting fair pay increases,” McManus said.
Ominously for workers, this interest rate rise is just the beginning.
Reserve Bank Governor, Philip Lowe, acknowledged that headline inflation will continue to rise toward 6% by the end of 2022. Lowe is also forecas a halving in economic growth from 4.25% this year to 2% next year.
Those number suggest the Reserve bank has further interest rate rises in its arsenal as it looks to curb inflation, which is more bad news for workers whose wages are stuck in neutral.
ACTU President Michele O’Neil is alarmed by the predicament the Morrison government has left workers in.
“The cost of everything is going up so fast but wages are going backwards in real terms.”
“Just a month ago, the Morrison government’s budget showed that workers’ wages were going backwards by around $500 in the first six months of this year. [The recent inflation numbers] show us it is four times worse than that. Workers are going to be losing round $2000 in the first six months of 2022.”
Workers know the Morrison government is not interested in acting to raise their wages.
Australians who are struggling to pay their bills, put petrol in their cars or are not buying that household appliance because they need to save money still remember former Finance Minister Mathias Cormanns’s admission that “low wages growth is a deliberate design feature of our economic architecture.”
When Scott Morrison plays his familiar tune of its “not my fault” and “not my job” in response to flat wages growth and roaring inflation, Australian workers see it for what it is: more self-serving spin from a self-absorbed Prime Minister.
Sally McManus points out the real-world consequences for this government’s reckless indifference to the plight of workers.
“If Scott Morrison hadn’t been completely missing in action on wages, Australian workers paying off a mortgage would have been better prepared for today’s interest rate rise.”
“Australians deserve better than a Prime Minister who doesn’t seem to care that their real wages are going backwards. Working people are doing it tough and they need a leader who will have a go at addressing the cost-of-living crisis that is sending our living standards backwards.”
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Interest rates rise worsens Morrison’s cost of living crisis