The ALP also wants an imposed solution, and is calling nebulously for the commission to deliver. But under the current laws, the commission is fully independent and must focus on a range of outcomes including employment, economic growth and profits. Opposition Leader Bill Shorten has thus far failed to explain what mechanism he might introduce to unilaterally achieve higher wages. His position will lack credibility if he does not soon give details of what risks otherwise being seen as a cynical ploy.
Household confidence has been buoyed for more than a decade by surging property prices. The dispiriting effect of stagnant wages was being offset by optimism about capital gains on dwellings. But that is being rapidly unwound as property prices decline.
So, what to do? Politicians should resist an unaffordable across-the-board vote-buying war, although personal income tax cuts skewed to the low-paid clearly have a role. There is merit in reviewing enterprise-based bargaining, which has undermined employees in wage negotiations. There is a reasonable argument workers should be able to negotiate at an industry level.
One of the most effective and efficient ways to stimulate the economy, thus boosting growth, profits and budget revenue is increasing the spending power of those at the low end of the pay scale, for they spend almost all the extra, having struggled for years with rising costs of living. That can be done through wage increases, tax cuts, direct transfer payments or a melange of the three. At this stage, no one is presenting a well-balanced policy, despite unanimity that real wages need to rise for the sake of the entire nation.