Higher wages, vehicle allowances needed given shock inflation figures, unions say

The latest jump in inflation, driven by the ongoing conflict in the Middle East, means that workers need significant wage increases and other accommodations, Australian unions have argued.

Yesterday (Wednesday, 29 April), the Australian Bureau of Statistics (ABS) reported that the annual consumer price index (CPI) climbed to its highest level in over two years in March, and trimmed mean inflation remained above the Reserve Bank’s target range.

Headline inflation rose 4.6 per cent over the year to March, up from 3.7 per cent in February, data from the ABS showed.

“March CPI inflation of 4.6 per cent is up from the 3.7 per cent annual inflation to February,” Sue-Ellen Luke, ABS head of prices statistics, said.

“Annual CPI inflation is the highest it’s been since September 2023.”

The largest contributors to annual inflation were housing (+6.5 per cent), transport (+8.9 per cent) and food and non-alcoholic beverages (+3.1 per cent).

CPI rose by 1.1 per cent in March, aligning with Commonwealth Bank (CBA) forecasts. Trimmed mean inflation rose 3.3 per cent over the 12 months to March, unchanged from February.

In response to the ABS’ data, Australian unions argued that this year’s Annual Wage Review claim will need to be increased beyond the initial 5 per cent claim “because soaring petrol prices are on the brink of wiping out the entire wage claim”.

The figures also, unions said, highlight the urgent need for an immediate increase in vehicle allowances, so that workers who use their own vehicles to get to worksites or to support vulnerable clients can afford to turn up for their shifts.

According to the president of the Australian Council for Trade Unions, Michele O’Neil, workers should not go backwards because of a conflict overseas.

“They were not responsible for petrol prices surging more than 30 per cent in a month, and they should not be punished for that with a real wage cut. Even before this, workers on award wages remain behind from the last spike in inflation after COVID, and despite progress over the last few years, they have not caught up,” she said.

“Even before this, workers on award wages remain behind from the last spike in inflation after COVID, and despite progress over the last few years, they have not caught up.

“Unions will be watching closely for any companies using rising costs as cover to price gouge. Workers do not want another situation where big companies profit during a war while everyone else is told to tighten their belts.

“Australians remember supermarkets using the cover of inflation during the pandemic to raise their prices and fatten their profits. We do not want a repeat of that sort of greedy profiteering.

“Without a fair increase to vehicle allowances, fast-food delivery drivers, aged care workers and disability support workers will continue paying out of pocket for using their own vehicle just to do their job. We need to see the fuel allowance for workers go up urgently.

“Employer groups will say that any wage rise will put pressure on inflation – like they do every year – despite the fact that they have consistently been wrong. Workers are still 4 per cent behind in their wages from where they were in 2022.”

Jerome Doraisamy

Jerome Doraisamy is the managing editor of Momentum Media’s professional services suite, encompassing Lawyers Weekly, HR Leader, Accountants Daily, and Accounting Times. He has worked as a journalist and podcast host at Momentum Media since February 2018. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of the Minds Count Foundation.

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