Treasurer Scott Morrison wants workers paid more, but won't say how much

Treasurer Scott Morrison wants workers paid more, but won't say how much

Treasurer Scott Morrison wants workers paid more, but won't say how much

Updated 6 February 2018, 11:30 AEDT

Treasurer Scott Morrison wants workers to be paid "more", but he won't say how much their wages should go up.

"More" is the only description Treasurer Scott Morrison is willing to give about what level of wage rises he wants to see.

Stagnant wage growth is worrying all sides of federal politics.

Prime Minister Malcolm Turnbull recently said wages are growing, but not enough.

When pressed for details on AM the Treasurer argued for the Government's company tax cuts to be fully implemented.

So far the Senate has only agreed to cut tax from 30 to 25 per cent for businesses with a yearly turnover of up to $50 million.

"What I want to see is businesses to be able to pay their employees more and they are not going to be able to do that if they are kept on a high-tax island," he said.

"I don't think you are going to get a wage increase in a business that is paying high taxes."

Mr Morrison rejected one leading economist's suggestion to boost wage growth.

CBA chief economist Michael Blythe is calling for a modern-day "accord" with big business to guarantee wages growth in exchange for company tax cuts.

He said it could be an agreement, similar to an approach being taken in Japan.

"I think one interesting example here is what they appear to be trying in Japan. That is where you trade off tax cuts, company tax cuts, in exchange for wage increases and more capital spending."

The Japanese Government plan would cut corporate taxes from 30 to 20 per cent for companies that aggressively raise wages and boost capital investment.

But Mr Morrison described that as a "highly regulated approach".

Shorten says companies won't pay more if tax is cut - 'pigs might fly'

The Opposition insists there is no evidence company tax cuts will lead to higher wages and argues it is not happening now despite record company profits.

Labor leader Bill Shorten dismissed the idea of a compact between business and government to direct part of company tax cuts to wage rises.

"Pigs might fly," Mr Shorten said.

"The idea that when you see large companies getting tax windfalls from their friends in the Turnbull Government that they are miraculously going to share this largesse with the workers of Australia — I am sorry, but that fairy tale does not have a happy ending."

In 1983 the Hawke Labor government struck a landmark deal known as "The Accord" where unions moderated wage demands in exchange for other benefits.

That trade-off included the introduction of superannuation and the universal health system Medicare.

Mr Morrison argued the accord period under the Hawke government was one of the slowest periods of real wage growth.

"It wasn't until the Howard-Costello government came in that we saw real strong growth in real wages and that wasn't done with the sorts of artificial and regulatory impositions that model would suggest."

As the Government pushes ahead with its company tax cut plan, Australian Super chairwoman Heather Ridout said it had become a polarising proposition that had put business offside.

Ms Ridout told Q&A Australia needed comprehensive tax reform rather than a reduction in just one area.