A debate over how to move wages has been clouded by overheated rhetoric, Government Services Minister Bill Shorten said.
The government has been locked in negotiations with Crossbench to get an agreement on its landmark industrial relations legislation before a self-imposed Christmas deadline.
He is due to go to the Senate during the last sitting days of the year, but lingering concerns over the definition of the size of a small business have stalled the proceedings.
Under the proposal, companies with fewer than 15 employees will be able to opt out of multiparty bargaining. A Labor-led Senate inquiry delivered on Tuesday recommended raising the threshold to 20.
Mr Shorten, who held the workplace relations portfolio under the Rudd-Gillard government, said the pay system will not “sink or swim” on the revised definition.
“Do I think ultimately the sky will fall if it’s under 15 or under 20? No, I don’t,” he told ABC Radio on Wednesday.
“There is a lot of overheated rhetoric in this salary debate. The truth is that for literally millions of people, they haven’t had access to a raise, even though everything else has gone up.
In his comments attached to the Senate inquiry, kingmaker David Pocock criticized the “insufficient” time given to the consultation of the bill given “a small number of provisions which have caused serious concern among a wide range of stakeholders”.
“For this reason, Senator Pocock argues that these most concerning provisions should be separated and considered separately with sufficient time to overcome any unintended consequences, while ensuring a mechanism to raise wages for all workers,” the report said.
Although Labor failed to win the May election with a mandate to introduce multi-party bargaining, the promise to shake up wages was at the heart of its political platform. He maintains that the IR overhaul will achieve this goal.
But RBA Governor Philip Lowe warned it would be “painful” for Australia to “buy into the idea that wages must rise to keep up with inflation”.
Dr Lowe told an economic forum in Melbourne about his concerns about the possibility of the wage rate spiraling as workers demand pay rises to keep up with the cost of living.
“If that were to happen, what do you think inflation would be next year? Seven percent, more or less (a little). And then we have to be compensated for that? Seven percent… and that’s what happened in the 70s and 80s. It turned out to be a disaster,” he said on Tuesday night.
The RBA expects inflation to peak at around 8% later this year, before gradually declining to 3% by the end of 2024.
Mr Shorten was quick to refute the RBA chief’s claim when asked on Wednesday morning.
“That’s not what’s happening. Many of these debates are theoretical. If wages move too far too fast, that’s not desirable, but wages that don’t move at all is a disaster,” he said.
“At the end of the day, I watch these coalition Conservative politicians and some of the senators, you know, patting their chins and saying how terrible it is if wages go too far. The problem is that salaries don’t go overboard. The problem is that they don’t move at all.
- RBA boss Philip Lowe’s warning on interest rate rises as inflation worsens
- Inflation to rise ‘significantly’, Treasurer Jim Chalmers warns
- ‘Quit’: RBA boss under pressure over fifth consecutive rate hike
- Bill Shorten’s sassy response to anti-vax senator‘s Covid question
- Reserve Bank of Australia tipped to raise interest rates by 0.5 per cent