Australia

Political battle over wages heating up

The prime minister is going after Bill Shorten, who's backing a wage rise for low paid workers. Source: AAP

Scott Morrison and Bill Shorten have locked horns in a political barney over wage growth, with the issue shaping as a cornerstone of the federal election.

Labor has declared that plans to lift wages for low-paid workers won't hurt the economy, after Scott Morrison stoked fears of job losses under a Shorten government.

Opposition Leader Bill Shorten has suggested he would tweak guidelines used by the Fair Work Commission to set the minimum wage, if his party wins the federal election.

Mr Morrison on Thursday challenged Mr Shorten to detail his plan, prompting the Labor leader to commit to further announcements in coming days.

"I noticed Mr Morrison saying that, somehow, if you lift the wages of people that's an economic disaster. When is it ever a good time for a Liberal to support a wage rise?" Mr Shorten said.

The prime minister claims interfering with the work of the independent wage umpire could force businesses to sack people.

"He's either lying to Australians that he can do something about their wages because he hasn't explained how he's actually going to do it," he told reporters in Melbourne on Thursday.

"If he's telling the truth then he's putting an enormous cost on small and family businesses that will force them to lay off staff."

Mr Shorten said corporate profits and the cost of living were rising at a rate vastly outstripping increases in pay packets.

"Wages haven't been invited to that party."

The Labor leader listed plans to reverse cuts to penalty rates, crack down on dodgy labour hire firms and protect subcontractors as other ways he planned to address sluggish wage growth.

Mr Morrison visited a northern Melbourne market on Thursday morning, while Mr Shorten toured a retail packing business in the Victorian capital.

"The way you increase wages is you have a strong economy and lower taxes," Mr Morrison said.

Mr Shorten said it was standard for governments to update the commission's guidelines, adding he supported the body's independence despite criticising its decision to cut penalty rates.

Major employer groups have locked in behind the prime minister's warning that unsustainable pay increases could cost jobs.

Restaurant and Catering Australia is calling for a freeze on the minimum wage for the second year running, ahead of the Fair Work Commission's 2019 review.

Australian Industry Group's submission to the commission calls for a two per cent minimum wage rise, while unions are looking for six per cent.

"Now is not the time for risky movements in minimum wages," Ai Group chief executive Innes Willox said in a statement.

Fair Work awarded an above-inflation minimum wage increase of 3.5 per cent last year, lifting the rate to $18.93 an hour.

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