The ACTU budget paper – Raise Wages and End the Cuts – outlines a road map to lift wages as a driver for economic activity and growth.

It calls on the Government to take its head out of the sand on wages and abandon its fantasy trickle-down economics approach.

The Morrison Government has made 21 forecasts, in budget and MYEFO updates, which made a range of inaccurately high predications including that wages growth would reach 3% this year. Current wage growth sits at a near-record low of 2.3%.

While predicting significant increases in wages the Government has cut wages by voting for penalty rate cuts, capped wage increases for its own employees below inflation and fought against any attempt to empower workers to bargain for wage increases.

The submission seeks a stated aim in the budget to reduce inequality through higher wages – including adoption of a Living Wage – which in turn will lift consumer demand as a driver of growth.


  • Flat wages mean that the average share of the economic pie going to workers is now lower than any 2-year period in the past 60 years – a 46.9 percent labour share of GDP.
  • After projecting wage growth between 2.5-3% in each of their five budgets, the actual change in real wages barely nudged the level of inflation – stuck in the mud at an around 2%.
  • In last year’s Budget, the Government were forecasting 3.25% nominal wage growth for 2019/20 followed by growth of 3.5 % in both 2020/21 and 2021/22.  Unfortunately for workers actual wage growth has fallen dramatically short of these forecasts, with the most recent annual data (WPI) suggesting annual growth of just 2.3%.

Instead of lying about wages rises and relying on disproven notions of trickle-down economics it is about time the Government wakes up to the reality that wages are simply too low.

The budget is expected to present tax cuts as an alternative to wage growth. Tax cuts do not deliver a uniform increase in the living standards of all workers. This can only be achieved with real increases in wages.

Tax cuts over wage rises ignores the reality that the Government is already failing to deliver essential services within the current tax base. We have one of the lowest tax to GDP ratios of any country in the OECD, putting huge pressure on public services like health and education.

Increasing wages and job security, especially for low and middle-income earners would require the Government to increase the minimum wage to a living wage, enact workplace reforms that improve workers’ rights and protections to reverse the growth in insecure work.

Quotes attributable to ACTU President Michele O’Neil:

“Working people know they can’t trust this government on wage rises. Morrison has promised wage rises again and again, as Treasurer and Prime Minister, while at the same time cutting real wages.

“This Government and its failed policies have created the wage growth crisis. To change the rules we have to change the government.

“Working people need the power necessary to win pay rises.

“Without concrete action on more secure jobs and fair pay rises, this budget will be another broken promise to the Australian people, another budget that is all about handing cash to the top end of town while promising but never delivering real pay rises.”