The Labor Opposition has seized on a warning by Reserve Bank Governor Philip Lowe that the JobKeeper wage subsidy should not be phased out too soon, insisting it identifies the dangers of the government's "snap back" strategy.
Workers' wages will continue to grow at about 2.2%, similar to the current WPI, partly because the forthcoming 0.5 percentage point rise in compulsory super payments will be mostly funded by forgone pay rises, according to the RBA.
The RBA has projected that the current pattern of "unusually" slow wage growth will likely continue until at least 2021, Governor Philip Lowe reminding a parliamentary committee that any pick-up was "both affordable and desirable".
Reserve Bank governor Philip Lowe has told a House of Representatives committee that the RBA is doing what it can to respond to slow wage growth, admitting his stance has been controversial, but has again stopped short of calling for a quick upswing.
The Reserve Bank has pointed to the concentration of cutting-edge software and information technology in a small number of businesses and narrow labour market segments as a factor behind flat wages growth.
RBA Governor Philip Lowe is maintaining his faith that the laws of supply and demand will eventually lead to higher wages, but has conceded that the low growth in pay is a global phenomenon that is troubling central banks and "no-one really knows how long it is going to last".
While retreating from his much-hyped "call to arms" for workers to demand higher wages, Reserve Bank Governor Philip Lowe today told a Sydney audience that a continuation of the current period of stagnation in wage growth would have an "insidious" impact on the economy.
Just a week after RBA Governor Philip Lowe called for workers to push for bigger wage rises, the FWC has approved a deal that secures increases of just 2% a year for his own 1000-strong workforce, but with the prospect, for some, of also winning performance-based bonuses.