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Only two ways to increase wages: Morrison

Business

Federal Treasurer Scott Morrison says there are two ways to increase wages – through a pay rise from an employer because of increased productivity or through an income tax cut.

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“I would like to see both,” he told the Bloomberg Summit in Sydney on Wednesday, adding Australians needed to earn more on a competitive world stage.

New data is expected to show wages growth remains at its slowest in at least 18 years, albeit just keeping ahead of equally benign inflation.

The wage price index – the Reserve Bank’s preferred measure of wage inflation – is expected to have grown by 0.6 per cent in the September quarter for an annual rate of 2.3 per cent.

This would be identical to the result in the June quarter.

Economists say with the jobless rate having remained above six per cent during the September quarter there is unlikely to be a more notable increase in wages just yet.

Morrison today also threw down the gauntlet to foreign investors illegally buying residential properties in Australia, saying they simply aren’t going to get away with it.

The treasurer announced the forced sale of seven properties, ranging from $5.2 million to as low as $154,000, on Wednesday.

The houses in Victoria, NSW and Queensland would be sold after their owners breached foreign investment rules.

An Iranian investor’s application to buy a property in Victoria worth $4.4 million was also denied.

Morrison said under the enforcement of the Australian Taxation Office, foreign investors who try to get around Australia’s laws aren’t going to get away with it.

“That’s my simple message. We’re not going to put up with it,” he told reporters in Sydney.

“I think people know I have a pretty strong history when it comes to enforcing the law in this country, whether it’s on our borders or in our social welfare system or in foreign investment.”

He said integrity of the law builds greater confidence in legitimate operations.

“Australia welcomes foreign investment but at all times foreign investors must comply with our laws,” he said.

Higher unemployment is usually associated with low wages growth.

However, last week’s unexpectedly strong labour force report for October did see the jobless rate tumble to 5.9 per cent in a promising sign for the employment outlook.

AAP

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