The government’s increasingly manic insistence that wages will start growing again any minute now has — just weeks after it was forced to downgrade wage growth forecasts in the mid-year budget update — received a body blow from a new employer survey.
The Australian Industry Group’s Business Prospects survey — part of a growing number of surveys that treat CEOs as perfect guides to the economy — reveals that CEOs expect “a continuation of the moderate wage rises experienced over the past couple of years. Wages pressure is identified by only 4.6% of respondents as their leading concern heading into 2018. This is sharply lower than in 2017 and below the levels reported in the previous four surveys.”
A continuation of “the past couple of years” means wages growth of about 2% — at a time when the government forecasts that inflation will go back over 2% and keep rising. So, the AIG’s respondents are confidently predicting real wage cuts for Australian workers and a level of nominal growth below even that in the revised MYEFO forecast, of 2.25%.
You also wonder about who the 4.6% of CEOs are who are complaining about wage pressures, and how out of touch with their own workers they are.
The overall tone of the survey is buoyant:
- “the large majority of CEOs plan to maintain or increase their spending on various types of business investment”;
- “sales are expected to increase for 67.3% of businesses in 2018”;
- “general business conditions are expected to pick up in 2018 for more businesses than in any of the previous five years” and 40% of businesses expect another increase in profits after business enjoyed a 20% profit surge in 2016-17.
All good stuff — except it raises the question that if things are so good for business, if they’re going to put on more staff, if they’re going to increase investment — why do they need a $60-plus billion handout from taxpayers to put on more staff and invest more? Or need, as AIG continually demands, radical industrial relations reform to enable them to cut wages and conditions more?