News // Economics
December 2022
Inequality and poverty is a policy choice – and the Stage 3 tax cuts will make both worse
When you reduce the revenue available to fund government services, you inevitably increase inequality
The economy is slowing as the Reserve Bank hits the brake
The build up of savings during the pandemic is over – now we need strong income growth to keep the economy going as the Reserve Bank tries to slow it.
The Reserve Bank needs to watch that it doesn’t push the economy off a cliff
For most of this year, the warnings and news about inflation have been one of hope for the best but experience the worst. Predictions of future inflation growth have continually been revised upwards and with it has been the suggestion that interest rates need to keep rising.
November 2022
Deal on IR Reforms Sets Stage for Faster Wage Growth
Industrial Relations Reform Sets Stage for Significant Acceleration of Wage Growth.
Rough times ahead for Australia’s economy as oil, gas and coal companies celebrate
The latest economic outlook from the OECD highlights the precarious path for Australia over the next few years.
Australians Working 6 Weeks Unpaid Overtime, Costing Economy Over $92 Billion: Go Home on Time Day Report
New research shows Australian workers are on average working 6 weeks unpaid overtime per year, costing over $92 billion dollars in unpaid wages across the economy. The average worker is losing over $8,000 per year or $315 per fortnight due to what researchers have branded “time theft”. 23 November 2022 marks Go Home on Time
Wages growth improves but real wages fall at a record rate
The latest wages price index figures show that for the first time since 2013 wages grew by more than 3% in the past year.
Restoring Collective Bargaining Coverage Would Boost Wage Growth: Research Report
Proposed reforms to Australia’s industrial relations laws are likely to support higher coverage for collective bargaining in the national labour market, and provide a boost to stagnant wage growth according to new research from the Centre for Future Work. The report reviews historical data on the erosion of collective bargaining in Australia, and its close
Gas companies are profiting off of human misery – we need a windfall profits tax
Russia’s illegal invasion of Ukraine caused a massive surge in gas and LNG prices that have enabled gas companies around the world, including Australia to make record-level profits.
Multi-Employer Bargaining Necessary for Fixing Wages Crisis
Proposed reforms to Commonwealth industrial relations laws would create more opportunities for collective bargaining to occur on a multi-employer basis, rather than being limited solely to individual workplaces or enterprises. Business groups have attacked this proposal as a dramatic change that would supposedly spark widespread work stoppages and industrial chaos.
IR Reforms To Close Off The ‘Nuclear Option’ Will Protect Wages and Entitlements
New research from the Centre for Future Work quantifies the dramatic risks faced by workers whose employers unilaterally terminate enterprise agreements during the course of renegotiations. This aggressive employer strategy, which became common after a precedent-setting 2015 court decision, would be curtailed by new industrial relations legislation proposed by the Commonwealth Government.
With household incomes set to fall, we need to think about what matters in the economy
The current tightening of monetary policy is undoubtedly having an impact. While it may take some time for the slowing of inflation to flow through to the official CPI figures – especially given the level of inflation that is being imported – the economy is set to slow drastically.
Would further interest rate rises do more harm than good?
In the past 7 months, the Reserve Bank has increased the cash rate by 275 basis points. That is as fast as any time since the RBA became independent. Given the pace of inflation growth, the rises are not wholly without cause, but as policy director, Greg Jericho notes in his Guardian Australia column the main drivers of inflation are now easing, and wages are yet to take off. In that case, should the RBA continue to raise rates given it will only slow the economy further?
October 2022
Inflation is soaring and real wages are plummeting
On Wednesday the latest inflation figures showed that in the 12 months to September prices across Australia grew by 7.3% – the fastest rate since 1990.
The Reserve Bank needs to acknowledge the failures of the inflation target
A comprehensive review of inflation released today by the Australia Institute’s Centre for Future Work reveals that the inflation targeting in place since the early 1990s is not the neutral policy many assume it is. In that time inflation has missed the target more from below than above, and has coincided with a shift of national income away from workers to profits as wages have stagnated.
Families change but the same problems remain
The latest data from the Bureau of Statistics on families shows that more than ever before couples with dependants are both working.
Webinar on Wages, Prices, and Power
The Australian Council of Trade Unions is sponsoring a series of webinars for union members, delegates, officials, and leaders on the current crisis in the cost of living in Australia. The surge in inflation since economic re-opening after COVID lockdowns has obviously intensified that crisis. But the seeds for it were planted long ago: by a decade of historically weak wage growth, a speculative property price bubble, and a systematic efforts to weaken collective bargaining and unionisation.
With a global recession looming the cure of inflation looks to be worse than the disease
This week the IMF released its latest World Economic Outlook. And the outlook is dire. Economic growth around the world was downgraded with recession-like conditions being predicted for many advanced economies including the USA, UK and much of the EU.
Yesterday’s Tomorrow Today – a new podcast from the Carmichael Centre at the Centre for Future Work
The Centre for Future Work and the Carmichael Centre are pleased to announce the launch of a new podcast project titled Yesterday’s Tomorrow Today, presented by the Laurie Carmichael Distinguished Research Fellow at the Carmichael Centre, Dr Mark Dean, and comedian and ecology researcher, Duncan Turner.
September 2022
The UK shows how bad the Stage 3 tax cuts will be
This week the UK government introduced massive high-income tax cuts – cuts that are not even as bad as the Stage 3 tax cuts here in Australia. And the reaction by the market was brutal. Investors saw the tax cuts for what they were – a redistribution of national income from the poorest to the wealthiest, that provided no economic growth. As a result the value of the UK Pound plunged.
International Seafarers Suffer $65 Million in Wage Theft Annually in Australian Waters
Seafarers working on foreign-registered freight ships in Australian waters face regular theft of wages and other entitlements due to legal loopholes and lax enforcement of labour standards, according to a new research report published today by the Australia Institute’s Centre for Future Work. The report, titled Robbed At Sea, examines records of wage inspections conducted
Work in the Care Economy Vital for Future Well-Being
There is growing understanding that care work — including jobs in aged care, disability services, early child education and care, and others — is of growing importance to future employment and wage trends, as well as to the quality of life of Australians who depend on these social and community services. For too long, jobs in these growing sectors have been devalued. Government underfunding and weak labour and quality standards have reinforced the degradation of work in care sectors. But with intense labour shortages, public concern about inadequate quality, and the need to expand services to meet social needs, there is now more widespread recognition that care jobs must be improved, and quickly: with more funding, better training, limits on private delivery, multi-employer bargaining, and more.
They didn’t cause the inflation, but workers are expected to cure it
Last week before the House Economics Committee, the Governor of the Reserve Bank made it clear that the current rise in inflation has nothing to do with wages growth. And yet he also made it clear he expects workers to bear the brunt of the cost that comes from slowing inflation.
The latest data shows just how bad housing affordability is
Since the Reserve Bank began raising interest rates in May, the housing market has very much come off the boil.
The GDP figures show the ongoing shift of the national income to profits
The June quarter GDP figures released by the Bureau of Statistics showed that over the past year the economy grew a seemingly strong 3.6%.
The PBO reveals just how much the Stage 3 tax cuts favour the wealthy
The Stage 3 tax cuts, which will essentially create a flat income tax system, have always been clearly biased towards high-income earners. For those earning over $200,000, the tax cuts represent a 4.5% cut compared to just 0.6% for someone on the median income of $60,000. But this week, the Parliamentary Budget Office has released costings that detail just how skewed the allocation of money is to the richest in our society.
August 2022
Market power costs consumers, workers and the whole economy
For most of the past 40 years whenever the discussion turns to the need to lift productivity, invariably the conversation is dominated by business groups and various media commentators who suggest the solution is more labour market flexibility. Just a bit more flexibility and productivity will improve!
The biggest real wages fall on record
The latest wages price index figures from the Bureau of Statistics reveal just how far workers ability to purchase items with what they earn has fallen.
The latest taxation statistics reveal the massive gender pay gap across the whole economy
The 2019-20 taxation statistics released this week by the ATO provide a plethora of data that reveals with precision the salaries of people by location, occupation age and importantly, gender.
Rate rises look set to dramatically slow the economy
The latest raise in the cash rate has meant interest rates have increased by more in 4 months than they have anytime since 1994.
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