Wages, Prices and the Federal Election

The recent federal election featured important debate regarding the rising cost of living in Australia, and whether and how wages should be boosted to keep up with higher prices. One exchange, late in the campaign, occurred when ALP leader Anthony Albanese stated his belief that wages should keep up with prices -- but then was strongly criticised for that view by Coalition leaders and some business commentators.

New exit poll results from the Australia Institute indicate that a very strong majority of voters (83%) in fact support the idea that wages should at least keep up with prices. This opinion was shared broadly across the political spectrum. Even 79% of Coalition voters supported lifting wages to at least keep up with inflation.

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Inadequate Sick Pay Contributes to Too Many Australians Working With COVID

Almost one in five Australians (and a higher proportion of young workers) acknowledge working with potential COVID symptoms over the course of the pandemic, according to new opinion research published by the Centre for Future Work.

The research confirms the public health dangers of Australia’s existing patchwork system of sick leave and related entitlements.

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Wages Crisis Will Continue Without Active Wage-Boosting Policies: Report

A comprehensive review of Australian wage trends indicates that wage growth is likely to remain stuck at historically weak levels despite the dramatic disruptions experienced by the Australian labour market through the COVID-19 pandemic. The report finds that targeted policies to deliberately lift wages are needed to break free of the low-wage trajectory that has become locked in over the past nine years.

The report, The Wages Crisis: Revisited, authored by three of Australia’s leading labour policy experts: Professor Andrew Stewart from Adelaide Law School, Dr Jim Stanford from the Centre for Future Work, and Associate Professor Tess Hardy from Melbourne Law School, updates analysis and recommendations from their 2018 edited book, The Wages Crisis in Australia.

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Free Education Can Rebuild Australia’s Public Universities

If the federal government lifts annual higher education spending to 1% of GDP, it could repair the destruction inflicted by the COVID pandemic and make universities more accessible and affordable for all Australians, according to new research from the Centre for Future Work at the Australia Institute.

The report analyses the current worrying state of Australia’s higher education sector based on current funding and policy trends, and provides an ambitious national vision for higher education that re-aligns the sector with its public service mission.

At the Crossroads, authored by Eliza Littleton, identifies seven key policy initiatives including free higher education for domestic students, that if implemented, would put Australia’s public universities on a path toward full revitalisation.

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High-Quality Public ECEC Would Lift GDP, Government Revenues

Australia’s economy would get a powerful boost from stronger public early child education and care services, according to new research from the Centre for Future Work at the Australia Institute.

Accessible and affordable child care services would support improved labour force participation and more full time work by women – converging with trends in other industrial countries (especially the Nordic countries, where women’s labour supply is much stronger than in Australia).

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Budget 2022-23 Wastes Fiscal Windfall on Election Gimmicks

The Commonwealth Government has tabled its budget for the 2022-23 financial year. As the nation emerges from two years of lockdowns and border closures, with less than two months until a federal election, this budget is focused on getting the government re-elected -- rather than addressing the challenges of public health, stagnant wages, and sustainability facing Australia.

This failure is all the more regrettable given the enormous discretionary fiscal resources which the government has at its disposal: the budget projects $133 billion in extra tax revenues over the next five years, compared to its MYEFO projections just three months ago, thanks to strong economic growth and rising nominal GDP. But instead of ploughing those revenues into reforming human services (like health, aged care, early child education, or disability services), undertaking a genuine policy to revitalise domestic manufacturing, or accelerating the energy transition, the government has prioritised one-time cash handouts to entice voters in the upcoming election.

In this comprehensive budget overview, the Centre for Future Work's team of economists unpacks the budget, considers its effects, and suggests alternatives.

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Australia’s Skills System Continues to Crumble After COVID

A new report by Centre for Future Work offers a comprehensive review of vocational education and training (VET) in Australia, confirming Australia’s VET system shows growing signs of erosion, fragmentation and dysfunction. Several high-profile government announcements during the pandemic designed to address skilled labour shortages have not altered the VET system’s worrying trajectory.

Fragmentation & Photo-Ops: The Failures of Australian Skills Policy Through COVID by Senior Economist Alison Pennington reviews official data on VET funding, enrolments, and apprenticeships. The statistics paint a grim picture of a VET system starved of consistent funding or focus, fragmenting into scattered offerings of non-accredited and ‘micro-credential’ courses, mostly provided by private for-profit training companies.

“Continued decline in enrolments and eight years of declining apprenticeship completions make it very clear: Australia’s domestic skills pipeline is in disarray,” said Alison Pennington, Senior Economist at Centre for Future Work and the report's author.

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Sustainable Energy Critical to Australia's Aluminium Future

New research from the Centre for Future Work shows that the rapid transformation of Australia's aluminium facilities to sustainable sources of electricity would spark substantial economic benefits: for the aluminium industry, its supply chain, and for the burgeoning renewable energy sector (which would achieve greater critical mass from major new power supply contracts).

The report, by Jim Stanford (the Centre's Director) and Alia Armistead, looks in detail at the Tomago aluminium smelter in the Hunter region of NSW. It is Australia's largest smelter, and is currently powered through electricity mostly sourced from coal-fired generation. The facility has pledged to move to renewable power sources by 2030 -- and the new report confirms that this would underpin long-term industrial and economic benefits felt in all parts of the country.

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As Collective Bargaining Erodes in Australia, Solutions from Other Countries Could Strengthen Bargaining and Lift Wages

New research on international collective bargaining systems, released today in a special issue of the peer-reviewed journal, Labour and Industry, finds that Australia’s industrial relations system is rapidly losing its ability to support wages in the face of numerous challenges (now including the Omicron outbreak).

On the heels of new data showing further erosion of Australia’s collective bargaining system, researchers and practitioners from five countries have identified best practices from other countries that could strengthen collective bargaining and lift wages.

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Putting a Cap on Community: The Economic and Social Consequences of Victoria’s Local Government Rate Caps Policy

The Victorian Government’s policy of capping of local government rates revenue in Victoria is a regressive move on economic, social and democratic grounds. By arbitrarily tying the growth in total rates revenue in each local government area to price indexes, the state government restricts the ability of local governments to respond to the COVID-19 crisis with expanded, secure employment and service offerings.

Rates on property are the largest single source of revenue to local governments in Victoria. Of total Victorian local government revenue in 2019-20 ($11.7 billion), rates accounted for $5.6 billion or almost half. Since 2016-17, the Victorian state government has capped the amounts local governments can collect from their ratepayers.

New research by the Centre for Future Work, commissioned by the Australian Services Union, finds that the imposition of rate caps has cost up to 7425 jobs in 2021-22, counting both direct local government employment and indirect private sector jobs. They have also reduced GDP by up to $890 million in 2021-22. The costs of suppressed local government revenues, and corresponding austerity in the delivery of local government services, will continue to grow with each passing year if the policy is maintained.

The rate cap policy becomes more restrictive as the overall economy slows, since the rate cap is tied to inflation indexes which tend to slow when the economy is weak.

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