Labor’s pledge to introduce real increases to the minimum wage is if it wins the Federal Election, and the simmering undercurrents of a cultural war, have been the standout campaign themes this week.

 

The determined pursuit of fairness has been a fixture of the Australian political landscape for decades, yet cultural wars are a newer phenomenon. The idiom of today suggests workers are competing with bosses and businesses who seek to keep to salaries as low as possible. The current atmosphere of business-bashing was first introduced by the Coalition, who targeted the unpopular banking sector with extra taxes. More recently, Labor have rejected the longstanding policy framework of a globally competitive economy, dynamic labour market, and lower taxes, in favour of a social safety net.

 

For weeks, Opposition Leader Bill Shorten has branded the upcoming election as a "referendum on wages", putting forward the simple argument that ‘‘no Australian working full-time should be living in poverty’’. Meanwhile, the Coalition is expected to announce another round of income tax cuts ahead of the Budget.

 

Unions have also chimed in, with the Australian Council of Trade Unions calling for a $73 a week increase to the minimum wage over two years in the pursuit of a “living wage”. Labor quickly distanced itself from the Trade Union’s push, suggesting the final verdict should instead come from the Fair Work Commission. The core assumption for the Commission will be that the current hourly rate of $18.93 must rise – however Labor is yet to reveal any guidelines detailing how this increase would be assessed.


Unsurprisingly, the Council of Small Business of Australia pushed back, stating increased wages would force more businesses to incur payroll tax, and consequently be forced to look at ways to absorb costs; either through increased prices or cutting workers’ hours. Similar sentiments were voiced by Prime Minister Scott Morrison, who accused Labor of engaging in the politics of envy, and warning that Bill Shorten’s plans would result in the dismissal of many workers.

 

Most recently, the Australian Industry Group proposed a 2 per cent increase to keep wages in line with inflation, meaning the 2.23 million Australians earning $19 an hour would see just enough extra cash in their pay packets to buy an upsized meal at McDonald’s.

 

If the next Federal Election is truly a referendum on wages, the key question for voters should be; Are the market determined rates fair and just, or should the government intervene?

Visit www.isentia.com/your-insight-into-the-federal-election for more information or get in touch with our team to discuss your needs.