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ACTU Secretary Sally McManus says the Reserve Bank is out of touch and living in "boomer fantasy land" if it thinks workers can afford real cuts to their wages.
- Ms McManus says the RBA was not "in touch with reality"
- She argues unions are incapable of delivering across-the-board wage rises in line with headline inflation
- The Labor government has backed RBA's view on real wage cut
The union boss said the RBA governor Philip Lowe changed his tune in his speech earlier this week about wages.
"He was the one who said that so long as wages keep up with inflation and productivity, they're not inflationary," she told RN Breakfast.
On Tuesday, Dr Lowe warned pay rises above 3.5 per cent, which is half the 7 per cent inflation forecast by the end of the year, could force the RBA to go harder on interest rates and prolong high inflation.
Last week, the Fair Work Commission lifted the minimum wage by 5.2 per cent, to $21.38 an hour, and workers on award rates will go up 4.6 per cent. This would affect more than 2.7 million workers.
The RBA's view on wages growth was backed by Employment Minister Tony Burke that workers might need to take a real wage cut to prevent high inflation.
"And that’s a pretty big problem if you’re, you know, making assumptions or trying to understand trying to analyse how things work."
Although Dr Lowe said there were signs of domestic factors contributing to the current high inflation, Ms McManus argued that inflation "has absolutely nothing to do with wages".
"We're not achieving 3.5 per cent, let alone 5 per cent, let alone 7 per cent. And so to think somehow that the system is going to deliver across-the-board pay increases of 5 or 7 per cent is boomer fantasy land," she said.
"Not realising that whole system would be incapable of delivering that. We do not have centralised bargaining in this country. It would not be possible for that to happen."
Ms McManus rejected the warning of a 1970s-style wage-price spiral as a notion used by employers to deny pay increases.
"Nurses and teachers will be pushing to make sure this year that their wages don't go backwards, their wages have gone backwards for years now," she said.
"Even the Reserve Bank governor is saying, 'it's fair enough this year or this catch up for what happened during COVID'."
Nurses and midwives across NSW will walk off the job next week in protest of the state government's budget decision of a 3 per cent pay rise for public sector workers.
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