Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Minister, yesterday's national accounts showed that profits share of national income hit a new record high and that wages share of national income hit a new record low. This means that, in the 60 years that the national accounts have been kept and published, never have business owners been getting a bigger slice of the pie and never have workers been getting a smaller slice of the pie. Will your government now finally accept that in the domestic context it is corporate profiteering that is a key driver of inflation and that wages are actually not driving inflation?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I thank Senator McKim for the question on the national accounts and his ongoing interest in the economy. I don't think we have ever said, in response to the final part of your question, that wages have been driving inflation. I don't think anyone on this side of the chamber has been saying that at all. On the broader question, there are some challenges in the national accounts that are clear, which makes our economic plan even more important than ever to roll out in relation to some of those issues we've seen in supply chains and in relation to some of the issues around productivity.

On the point about businesses and their profits, we want business to do well. We think it is important that business does well, but we've been on the record a number of times, including as a major part of our election campaign, speaking about the fact that we want to see wages moving. That's why we have done absolutely everything we can since coming to government to make sure that we are supporting sensible and reasonable wage increases, particularly in areas like the minimum wage for working people on the lowest wages in the country and also in the area of aged care, where we're supporting the Fair Work Commission.

We've got some work underway around workplace relations reform, which, as you know, the Senate will have to deal with at some point later this year. We are doing everything we can to make sure that working people are getting a decent pay rise. That has been one of the major failings in our economy over the last 10 years, and it was because the mob over there had wage suppression as a deliberate design feature of their economic architecture. We are breaking down that architecture because we want to see wages grow. (Time expired.)

Sue Lines (President) Share this | Link to this | Hansard source

Senator McKim, a first supplementary?

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Minister, today in his speech to the Anika Foundation, RBA Governor Dr Philip Lowe yet again failed to acknowledge the role of corporate profits driving inflation—and, I might reflect, neither did you in your answer. Yet in July Dr Lowe said workers should anchor their expectation of wage increases at 3.5 per cent, well below inflation. Are you comfortable with an RBA governor jaw-boning down wages but saying nothing about corporate profits?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

(—) (): I'll have to go back and look at it. I remember the governor making comments about wanting to see wage increases with a three in front of them. My recollection is he said that at a time when inflation was sitting below three per cent, probably in the order of 1.7 per cent. My recollection of that is that the governor was saying that wages were a handbrake on the economy, or slow wages growth was a handbrake on the economy, and he wanted to see them get moving. We are now, of course, in a different environment, and I've only had a short opportunity to look at Governor Lowe's remarks in his speech today. But I think that in his speech he went through that and explained. I think he used the word 'surprised' around the increase in the rate of inflation, and he certainly went through the unexpected nature of that inflation surge and some of the reasons behind that in detail. I think his record on wages has been— (Time expired.)

Sue Lines (President) Share this | Link to this | Hansard source

Senator McKim, a second supplementary?

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Minister, last year Dr Lowe said that the RBA would not increase interest rates until wages growth was materially higher. Real wages are going backwards, but the RBA has increased rates for five consecutive months after effectively telling Australians they would not go up until 2024. Do you agree that we need some accountability in the system, and do you agree that Dr Lowe has got to go?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

In the minute available, there was a lot in that question to unpack. I strongly support the independence of the Reserve Bank and the longstanding convention that the bank should not be interfered with by politicians. I think the review that's underway is useful, and Governor Lowe has made comments on that today. I think the Reserve Bank is doing the work that it needs to do to bring inflation down, but the review will certainly assist all of us to ensure that the Reserve Bank remains fit for purpose. And I think the governor has been accountable for the comments he's made and some of the decisions the bank has made, particularly in the last few months, in raising interest rates. I understand he's given his speech today, he's given a long press conference afterwards, so, in that respect, he has been accountable for those decisions.