ACTU Secretary Sally McManus says Reserve Bank in ‘boomer fantasy land’ over wage-price spiral fears

ACTU Secretary Sally McManus says the Reserve Bank is out of touch and living in “boomer fantasy land” if it thinks workers can afford real cuts to their wages.

The union boss said the RBA governor Philip Lowe changed his tune in his speech earlier this week about wages.

“He was the one who said that so long as wages keep up with inflation and productivity, they’re not inflationary,” she told RN Breakfast.

On Tuesday, Dr Lowe warned pay rises above 3.5 per cent, which is half the 7 per cent inflation forecast by the end of the year, could force the RBA to go harder on interest rates and prolong high inflation.

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Inflation higher than expected: RBA Governor Philip Lowe

Last week, the Fair Work Commission lifted the minimum wage by 5.2 per cent, to $21.38 an hour, and workers on award rates will go up 4.6 per cent. This would affect more than 2.7 million workers.

The RBA’s view on wages growth was backed by Employment Minister Tony Burke that workers might need to take a real wage cut to prevent high inflation.

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