Central bank chief urges pay rise for Australian workers
Workers in Australia have a powerful new ally when it comes to their salary negotiations this year, with Reserve Bank of Australia governor Philip Lowe (pictured) urging employers to price in a significant pay rise for their staff.
This follows “year after year” of poor income growth, which has become a threat to the Australian economy.
The call also coincides with falling property prices in Australia’s major cities, and expectations that interest rates will need to be cut beyond already low levels in 2019.
“Since 2016, aggregate household disposable income has grown at an average rate of around 2.75% per year. This is down from an average of 6% over the preceding decade,” Lowe told a Parliamentary Committee hearing last week.
“For many people, it has become harder to see the lower growth in income as just a short-term development that can be looked through.”
Lowe says a permanent increase in household income will help to give consumers confidence, and therefore kick-start the economy this year.