Business lobby boss wants wages in line with living costs in jobs summit agenda

The head of a powerful business lobby has broken ranks with other industry groups and urged that wages keep pace with rising living costs, singling out the nation’s embattled teachers as among those who should be paid their worth.

Jennifer Westacott, the chief executive of Business Council Australia – which represents many of the country’s largest employers including McDonald’s, Coles and Woolworths – also said Pacific Island workers should help fill the national skills shortage by opening up visa pathways for full-time work, training and apprenticeships in Australia, foreshadowing the lobby group’s agenda for Prime Minister Anthony Albanese’s jobs summit.

Business Council chief executive Jennifer Westacott has outlined her agenda for the jobs summit.Credit:Alex Ellinghausen

In a wide-ranging speech to the Australia Club in Sydney on Wednesday, Westacott warned against migration becoming a battleground while outlining her vision of the nation as a self-sufficient, “frontier society” that established a home-grown skills base while looking after its neighbours.

She said the economic circumstances were similar to those leading up to former prime minister Bob Hawke’s 1983 summit, but the fundamental difference was Australians had experienced a decade of slow wages growth, rubbishing “counter-productive” labour shortages as a solution.

“The reason people feel they can’t get ahead is that their wages haven’t kept pace with living costs and they’ve fallen well below rising inflation,” Westacott said. “If you think about it, it used to take about two years for wages to rise about $100 a fortnight, now it takes about seven.

“In Hawke’s time, median house prices were about three times average wages, but these days they are almost eight times,” she said but stopped short of advocating wages be in step with headline inflation.

The Reserve Bank projects inflation could rise to 7 per cent by the end of the year and the nation’s workers are being warned of a greater-than-expected fall in real wages. Several unions are fighting for pay increases above the 5.1 per cent consumer price index, prompting warnings of a wage-price spiral.

The BCA did not make a submission to the Fair Work Commission’s annual wage review, where the Australian Chamber of Commerce and Industry called for a modest 3 per cent rise in the minimum wage as workers grappled with much higher costs of living. The Fair Work Commission ultimately settled on a 5.2 per cent increase.

With wage growth being an area of focus at the jobs summit, Westacott said it wasn’t going to be achieved through “industrial militancy or poor employer practices”.

Following high-profile strikes in NSW that saw tens of thousands of teachers walk off the job, Westacott urged Australians to stop blaming teachers for declining education standards, and said they should be paid according to “standards and experience” to encourage the profession.

Following Albanese’s backing of expanding the Pacific Australia Labour Mobility Scheme to fill job vacancies in aged care, Westacott said it could be widened to allow workers from those countries to obtain four-year visas, full-time jobs and apprenticeships, and that employers could provide housing and other incentives.

The Pacific Australia Labour Mobility Scheme should be broadened to allow workers to build a range of skills in Australia, Westacott says.Credit:Jason South

“This would involve Pacific Islanders undertaking short courses of micro-credentials at TAFEs, universities, or other training providers. They could continue to apply their new skills here or return home and share what they’ve learned,” Westacott said, adding private industry should also “do its part” by investing in regional infrastructure.

Skills and Training Minister Brendan O’Connor met with state and territory ministers on Wednesday to revive the national skills agreement, a plan to create a cohesive approach to addressing the worker shortage.

“According to the OECD, Australia is experiencing the second most severe labour shortage in the developed world,” O’Connor said during a press conference.

The government will prioritise processing almost 60,000 permanent visa applications lodged by skilled workers based overseas to unclog a backlog contributing to the skills shortage.

He said the government had to fix “unjustifiable wait times” for skilled migrants after The Sydney Morning Herald and The Age revealed a successful international ad campaign for nurses to come to Australia was thwarted by processing delays that took several months.

“That’s why we’re looking at accelerating visa process where there’s a genuine demand. We need to respond to that quickly and that’s why we are unclogging the visa process,” he said.

The Australian Medical Association, aged care providers, and other industry bodies, are calling on the government to temporarily drop the requirement to prioritise local recruitment so they can more easily hire workers from overseas.

O’Connor said the requirement, called labour market testing, was there to protect the current domestic labour market. “So we’d have to examine whether in fact, their suggestion is wise,” he said.

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