00:01well it doesn't look too good for them does it joe because um clearly wages are not keeping up
00:06with inflation that's a fairly recent phenomenon earlier last year we were starting to see some
00:12real wages growth come back after a period a long period when they hadn't been keeping
00:17their head above water now we're back in that situation but it's not because wages aren't
00:22growing fast enough they're pretty reasonably you know around three and a half percent that's not bad
00:27for long-term averages it's because inflation hasn't got back to where it needs to be we've
00:33seen that spike up more recently and that's a problem for both the government and the rba and
00:39so is it likely that real wages will continue to fall behind inflation over the coming six months
00:45at least yeah look i i think so um the labor market you know the rba tells us is quite
00:51tight
00:51unemployment is relatively low by historical standards but we know that particularly in
00:56some sectors you know wages growth is coming down particularly if we look at those not on awards
01:01or enterprise bargaining agreements individual agreements only got a three percent increase
01:06over the last year so they're even further behind than those on awards or bargaining agreements
01:11that's not going to change anytime soon inflation is going to take a while we've been told by the rba
01:16to get back towards that middle of the band so we're looking probably at a tough 2026 unfortunately
01:22so would unions in the midst of bargaining right now be justified in pursuing three-year deals of at
01:28least three and a half percent over three years look i think we've got to be very careful obviously
01:33everyone you know needs to put food on the table and pay the mortgage or the rent but at the
01:38same time
01:38we can't get caught in some sort of wage price spiral where we keep getting wages go higher to try
01:44and track
01:44prices that then leads to higher higher wages and we get in this this vicious cycle so it's a fine
01:50balance at the moment the missing element of course is productivity if we can see productivity gains
01:56then that raises the ceiling on how far wages growth can grow but of course we're not doing very well
02:02on
02:02that front at the moment yeah so productivity is going to be key to turning this around over the coming
02:07years how how do you adequately address that how do you turn that around well it's no simple solution
02:13and it doesn't just rest with government either they're half the story but obviously businesses
02:18themselves their practices need to change we're seeing some of that of course with the adoption of
02:23you know ai into into broader systems that makes people more efficient at their at certain tasks
02:28um you know right across the economy we're seeing it with having more effect in the u.s economy
02:33particularly but that's not again the answer to everything or every sector um you know ai won't help you
02:39get a better haircut for example and we are very much a services-based economy so technology is part
02:46of it we've got to see skills improve we've got to see businesses investing more in both capital you
02:51know in terms of the equipment as well as in the workforce government supporting that through the
02:56education sector making sure that our tax system is is you know up to scratch uh that our regulatory
03:02system is doing the best that it can we've had a productivity roundtable you know quite a while ago now
03:07uh let's see what what comes out of that perhaps uh through the mayor budget and what's your
03:13perspective on how much the government is spending and how it's spending it in light of the inflationary
03:18challenges yeah well i think we've seen um you know the government start to pull back a little bit but
03:24still you know the biggest wage increases were in the public sector very much state sector driven
03:30rather than than federal but we've seen a lot of those agreements um some of its catch up um and
03:37and delayed increases but even so there's been stronger pressures in in that public sector
03:41we do need to see obviously uh budgets particularly at the state level start to get a little bit more
03:47under control we're seeing blowouts and all sorts of infrastructure projects um but at the same time
03:53obviously people don't want to see their basic supports health education the ndis we've got more
03:58demands on on defense you know it's always very easy to say cut the budget it's an awful lot harder
04:04to do
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