We’ve been repeatedly warned that caps on public sector wages will hold down wages growth. That’s exactly what’s happening.
“Wage and price pressures remained subdued,” the Reserve Bank noted in the minutes of its May meeting, “despite the strong recovery in economic activity in Australia.” And a big part of that is the refusal of governments to increase public sector wages.
“Members also noted that public sector wage policies were likely to restrain aggregate wage outcomes,” the minutes continued.
Today’s Wage Price Index figures for the March quarter demonstrate that perfectly.
Go deeper on the issues that matter.
Already a subscriber? Log in to keep reading.
Or, register your email address for a FREE 21-day trial.
