Business Council hits back at RBA on low wages

20 June 2017

The greatest thing a government can do for its citizens is make sure they have a meaningful job and a decent income

Australia's peak business group the Business Council of Australia (BCA) has hit back at central bank Governor Philip Lowe over his comments on low wages growth in Australia.

Speaking at the ANU Crawford Australian Leadership Forum, BCA President Grant King said industry would be happy to see wages grow, but only in return for productivity gains.

"There is no doubt in our mind and in the minds of our members that the greatest thing a government can do for its citizens is make sure they have a meaningful job and a decent income," Mr King said.

"We don't think the answer is to just say to give people more money or grow their incomes.

"Business would be delighted to be able to see growth in income, provided we can see productivity growth and growth in our revenue and innovation and support for policies that drive innovation to create new jobs and new opportunities.

"So what we've got to do is make sure that rather than rely on terms of trade, we rely on productivity growth and innovation to create the basis for higher incomes."

Speaking on the opening day of the Crawford Australian Leadership Forum, Dr Lowe commented on low wages growth, and suggested larger wage rises would be good for the economy.

"As things currently stand, it looks likely that average growth in per capita incomes over the next quarter of a century will be lower than over the past quarter of a century. We should, though, be capable of stronger growth than we have seen over the past few years," Dr Lowe said.