Malcolm Turnbull has attacked Labor for backing union demands to increase minimum wages, claiming that dramatic rises will cause unemployment.
Turnbull accused Bill Shorten of being a “craven populist” who was prepared to sacrifice jobs for wage growth, at the Australian Financial Review conference on Wednesday.
Labor has signalled it will take a more aggressive stance on the minimum wage and is considering a move to industry-level bargaining to boost the power of low-paid workers.
The comments suggest the Coalition will target Labor for pushing for higher wages despite the fact the government’s own projected surplus in 2020-21 is highly dependent on optimistic wage growth assumptions.
The Turnbull government is prosecuting a difficult line, arguing that company tax cuts will inevitably lead to increased jobs and wages as wages stagnate despite continued economic growth and improved labour productivity.
Turnbull attacked Labor for opposing company tax cuts, suggesting the opposition had suspended the “laws of economic common sense”.
“We need to bring down our tax rates on business because when you increase the return on investment you get more investment, you get more jobs and you get better-paid jobs because you get better productivity,” he told the conference in Sydney.
Turnbull acknowledged that despite improving economic conditions “we have had modest average real wages growth”.
“But when faced with a choice of modest wages growth or long queues at Centrelink only a blinkered ideologue or the most craven populist would choose higher unemployment – and those are exactly the policies being advocated by Mr Shorten and the Labor party.
“Any attempt to regulate our way out of modest wages growth will put a handbrake on job creation.”
Turnbull said the only “lasting answer” to low wages growth was economic growth, and growth would eventually boost wages because “the laws of supply and demand have not been suspended”.
Labor’s policy on wages is still being formulated. It is likely to make submissions to the Fair Work Commission calling for a higher minimum wage but has not yet decided, if elected, how it will change the process to increase wages.
At the National Press Club on Wednesday, deputy Labor leader Tanya Plibersek said that “further legislative reform” may be needed to fix gender pay gaps between male and female-dominated industries.
In February childcare workers lost an equal pay case. Plibersek said of the case that it “beggars belief” to say there is no gender discrimination in their pay. She cited the fact early childhood educators with a certificate three qualification earn $20 an hour compared with metalworkers with equivalent qualifications.
The Australian Council of Trade Unions has called for the minimum wage to become a “living wage” targeted at 60% of average weekly earnings, language that has been picked up by Labor.
Turnbull said in 2007 Kevin Rudd ran as an economic conservative but Shorten “is running an anti-business agenda”, citing the fact Labor opposes company tax cuts and is looking to increase taxes on high-wealth individuals and family trusts.
“As far as wages are concerned, he wants to support the ACTU in creating dramatic increases in the minimum wage – which we all know would have the result of less employment.”
In its 2017 minimum wage decision, the FWC said that “modest and regular wage increases” do not increase unemployment.
In doing so, the commission noted that research suggests it may have been “overly cautious” about the effect of wages growth on unemployment in previous years.
In 2017 FWC ordered a $22 a week increase, a rise of 3.3%, compared with a rise of $15.80 or 2.4% in 2016.
Despite that wage rise, the number of jobs in Australia increased by 403,000 in 2017, a fact which Turnbull trumpeted at the conference.
Turnbull also attacked Shorten for flip-flopping on the Adani Carmichael coalmine, saying businesses needed certainty to invest.
“The certainty that politicians will not withdraw their support for a project or revoke an environmental licence on a political whim,” he said.
Turnbull said that Shorten’s comments that he does not support the Adani mine “represent a genuine sovereign risk that would ultimately cost jobs and investment”.
