Invest
Experts look elsewhere for way forward on wage growth
Overseas examples could provide a path forward for those looking to boost Australia’s wage growth.
Experts look elsewhere for way forward on wage growth
Overseas examples could provide a path forward for those looking to boost Australia’s wage growth.
With wage growth at record lows, experts are looking beyond Australia’s own borders for potential solutions.
A new report released by The Australia Institute has examined how labour market reforms seen in New Zealand and Germany could act as an inspiration for local legislators looking for a way forward on wage growth.
“The erosion of collective bargaining has been a major factor in Australia’s record-weak wage growth over the past decade,” explained senior economist at the Centre for Future Work Alison Pennington.
According to her, the New Zealand-style reforms or coordinated sectoral bargaining systems seen in the Nordic and continental European countries could provide an avenue to tackle this problem.
“Australia should learn from those countries and take urgent measures to stop the decline of collective bargaining here,” she said.
Ms Pennington said that there is a wealth of experience available from other countries that demonstrates the potential for collective bargaining to be modernised, offering Australian workers a better chance at fair compensation and better working conditions.
“Unfortunately, Australian governments seem more obsessed with vilifying and policing unions, instead of engaging them as full and constructive partners,” she noted.
In the future, Ms Pennington predicted that this erosion of collective bargaining would continue to lead to even weaker wages.
Speaking to nestegg, The Australia Institute economist Dr Jim Stanford noted that wage growth since 2013 has been consistently weaker than any time since the 1930s.
“The government’s own policies are the main culprit in wage stagnation: attacking unions and collective bargaining, freezing pay for public sector workers, and opposing minimum wage increases,” he said.
Data released this week by the federal government suggested that collective bargaining coverage has declined during the pandemic, with approximately 600,000 workers losing enterprise agreement coverage over the last two years.
United Workers Union secretary Tim Kennedy said that contractions of Australia’s collective bargaining system are key drivers of low wage growth.
“Australian workers need an effective system of collective bargaining that goes beyond the legal entity that directly employs them,” he said.
Mr Kennedy argued that a strong collective bargaining system ensures workers have greater control over the safety of their work, regardless of the sectors, industries, or labour hire arrangements.
Of course, simply earning a higher salary and ensuring access to safer working conditions aren’t the only things that Australian workers are missing out on as a result of an inadequate collective bargaining landscape.
Deakin University Professor of Politics and Policy Andrew Scott added that the current situation is exacerbating deficiencies in training arrangements, leading to more misalignment between jobs and skills.
“Australia can learn much from the Nordic countries’ superior economic and social policy outcomes that arise from well-integrated skills and collective bargaining systems,” he said.
RELATED ARTICLES
-
Australia’s spending surprise raises the odds of a February rate move — here’s how to protect margin and momentum
-
Australia’s inflation cools to 3.4% — why the RBA’s next move still isn’t a lay‑up for business
-
Inflation cools to 3.4% — but the RBA’s reaction function keeps businesses on a knife-edge
About the author
About the author
Economy
Australia’s spending surprise raises the odds of a February rate move — here’s how to protect margin and momentum
Household outlays are running hotter than economists expected, with the latest ABS readings showing broad-based gains across services and goods. That resilience is exactly the kind of demand impulse ...Read more
Economy
Australia’s inflation cools to 3.4% — why the RBA’s next move still isn’t a lay‑up for business
Headline inflation easing is good optics; balance sheets feel something different. With year‑on‑year CPI down to 3.4% in November from 3.8%, hopes for rate relief are rising — but policymakers remain ...Read more
Economy
Inflation cools to 3.4% — but the RBA’s reaction function keeps businesses on a knife-edge
Australia’s headline CPI edged down to 3.4% year-on-year in November, from 3.8%, easing immediate pressure but not eliminating the risk of further tightening. With services inflation sticky and ...Read more
Economy
Higher-for-longer, not higher forever: How Australia’s inflation ‘surprise’ is rewriting CFO playbooks for 2026
Australia’s latest inflation pulse eased but didn’t budge bank outlooks: near‑term rate cuts are still a long shot, with some houses flagging upside risk. That steadier‑for‑longer cash rate is pushing ...Read more
Economy
Australia's inflation illusion: the real challenge lies in pricing power and productivity
Headline inflation has cooled to 3.4% year-on-year, but the Reserve Bank’s caution—and a still‑hot housing backdrop—mean the rate threat hasn’t left the room. For boards, the next few quarters are ...Read more
Economy
When house prices lift, tills ring: A case study in turning Australia’s wealth effect into growth
Australia’s latest upswing in household wealth, anchored by higher dwelling values, is more than a feel‑good statistic—it is a profit and planning signal. The ABS notes property’s centrality to ...Read more
Economy
RBA's hawkish stance reflects inflation concerns, State Street economist comments
In a recent statement, the Reserve Bank of Australia (RBA) has signaled a hawkish stance on interest rates, drawing insights from financial experts about the implications for Australia's economic ...Read more
Economy
Navigating the inflation maze: How CFOs can outsmart economic hurdles in Australia
Fresh inflation data have cooled expectations of near-term rate cuts in Australia, intensifying pressure on margins, capital allocation and demand. Rather than wait for monetary relief that may not ...Read more
Economy
Australia’s spending surprise raises the odds of a February rate move — here’s how to protect margin and momentum
Household outlays are running hotter than economists expected, with the latest ABS readings showing broad-based gains across services and goods. That resilience is exactly the kind of demand impulse ...Read more
Economy
Australia’s inflation cools to 3.4% — why the RBA’s next move still isn’t a lay‑up for business
Headline inflation easing is good optics; balance sheets feel something different. With year‑on‑year CPI down to 3.4% in November from 3.8%, hopes for rate relief are rising — but policymakers remain ...Read more
Economy
Inflation cools to 3.4% — but the RBA’s reaction function keeps businesses on a knife-edge
Australia’s headline CPI edged down to 3.4% year-on-year in November, from 3.8%, easing immediate pressure but not eliminating the risk of further tightening. With services inflation sticky and ...Read more
Economy
Higher-for-longer, not higher forever: How Australia’s inflation ‘surprise’ is rewriting CFO playbooks for 2026
Australia’s latest inflation pulse eased but didn’t budge bank outlooks: near‑term rate cuts are still a long shot, with some houses flagging upside risk. That steadier‑for‑longer cash rate is pushing ...Read more
Economy
Australia's inflation illusion: the real challenge lies in pricing power and productivity
Headline inflation has cooled to 3.4% year-on-year, but the Reserve Bank’s caution—and a still‑hot housing backdrop—mean the rate threat hasn’t left the room. For boards, the next few quarters are ...Read more
Economy
When house prices lift, tills ring: A case study in turning Australia’s wealth effect into growth
Australia’s latest upswing in household wealth, anchored by higher dwelling values, is more than a feel‑good statistic—it is a profit and planning signal. The ABS notes property’s centrality to ...Read more
Economy
RBA's hawkish stance reflects inflation concerns, State Street economist comments
In a recent statement, the Reserve Bank of Australia (RBA) has signaled a hawkish stance on interest rates, drawing insights from financial experts about the implications for Australia's economic ...Read more
Economy
Navigating the inflation maze: How CFOs can outsmart economic hurdles in Australia
Fresh inflation data have cooled expectations of near-term rate cuts in Australia, intensifying pressure on margins, capital allocation and demand. Rather than wait for monetary relief that may not ...Read more
