More shocking reporting from the rentier foghorn today pertaining to the outrageous real income shock landing on Australians thanks to Treasurer Jim “Chicken” Chalmers:
Wage growth in Australia is now tracking at 2.6 per cent, with private sector wage growth at 2.7 — the highest since September 2013. But Mr Chalmers told reporters on the sidelines of the International Monetary Fund’s annual meetings that this would be upgraded in his first budget on October 25.
“We expect wages growth to pick up,” Mr Chalmers said. “You will see that in my forecasts that I release in my budget.
“Wage growth needs to be strong and sustainable as well. The primary focus of Australians is what’s happening to their own pay packets.”
…His budget will, however, show some increase in inflation next year not due to wages but electricity prices.
“We will update our inflation forecast in the budget,” Mr Chalmers said. “We still expect it to peak in around Christmas time, but there is some prospect that upward pressure on electricity prices will change the profile of inflation after that.
In other words, inflation will stay stronger for longer thanks to Chicken Chalmer’s own total failure to address the Evil Gas Cartel. The result is not rising wages growth. It is a calamitous shock to real wages growth. This is very much in line with my own outlook.
Chicken Chalmers can stop the energy shock in its tracks with domestic reservation, export levies, or super profits taxes for gas and coal. But he refuses to do so because he is afraid that he might upset a few miners:
A Labor source said Dr Chalmers was still “scarred” from the failed “super profits” mining tax in 2010 when he was a senior adviser to then treasurer Wayne Swan, and that he did not want to revisit the idea.
The consequences of this cowardice are shocking. Chicken Chalmers will deliver the largest dump in Australian household real income in modern history:
According to my best guess (using annual data) this will make Chicken Chalmers responsible for the worst shock to living standards of any treasurer since 1983 (and probably a lot longer but there is no data):
Enjoy your “upgraded wages growth”.
