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Real wages.



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PRIME MINISTER

REAL WAGES

A Unions NSW report which doubts the assertion that real wages have increased by 14 per cent under the Government is fundamentally flawed.

Contrary to the claims of the union movement, real wages have increased markedly over the past nine years. Crucially, lower paid workers have shared in these real wage rises.

The University of Sydney research cited by Unions NSW bears out this point. Their very own tables show that the Federal Minimum Wage increased from $349.40 in 1996 to $484.40 by 2005 - in real terms an increase of more than 12 per cent.

This contradicts a Unions NSW claim that ‘workers in the highest percentile were the only ones to enjoy a double digit increase in real wages.’

The tables also demonstrate that average weekly ordinary time earnings have increased by 20 per cent in real terms.

The Government’s assertion that real wages have risen by 14 per cent is based on the Australian Bureau of Statistics Average Earnings measure published in its quarterly National Accounts. It covers the nine-year period from March 1996 to March 2005. It should be pointed out that part of the Unions NSW analysis used to criticise the Government’s figures is limited to a four-year period from 1997 to 2001.

Data from the March Quarter 2005 National Accounts shows that average earnings have, in fact, risen by 38 per cent in nominal terms over the period since March 1996. After taking account of the corresponding National Accounts indicator of inflation, measured real wages across Australia have increased by 14.7 per cent under the Coalition.

The comparable figure under 13 years of the previous Labor Government was a mere 1.2 per cent rise in real wages.

Separately, Australian Bureau of Statistics analysis on household incomes shows that over the ten-year period from 1994-95 to 2003-04 the real incomes of low and middle income households have increased by a proportionately greater amount than the richest households.

It is instructive that as recently as July, the Secretary of the ACTU, Mr Greg Combet, told the National Press Club that:

“Australia is currently in its fourteenth consecutive year of economic growth - a historically significant period of economic expansion, low inflation, productivity growth and low www.pm.gov.au

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unemployment… Average adult full-time earnings have increased by 4.1 per cent per year and Australia has risen to eleventh in the OECD for GDP per capita.”

It is disingenuous for the union movement to now be claiming that workers have missed out under the Coalition. Nothing could be further from the truth.

On any reading, the workers of Australia have prospered under the good economic management of the Coalition Government, seeing their wages grow, their interest rates lowered and their disposable incomes and living standards rise.

The Government will not rest on its laurels and is committed to further strengthening the economy and improving living standards.

That is why we must press ahead with reforms to our workplace relations system. We need to entrench the culture of wage rises linked to productivity to ensure a continuation of the real wage outcomes that have benefited Australia’s workers.

29 August 2005