Australian Economy

Wage debates and inflation are just the tip of what business want the new government to tackle

As parliament welcomes some new suits, Luke Williams is busy cleaning them. 

His laundromat and dry-cleaning delivery service in suburban Melbourne is a microcosm of the precarious economic situation that Australia’s new Labor government has just inherited.

Laundry Warehouse uses a lot of power to run its washing machines and delivery van – and those costs are still high despite the last government’s temporary slashing of the fuel excise.

“Anything to keep the cost of fuel down is going to be beneficial to us,” Luke says.

As margins suffer, the family-owned business may soon rise prices for its customers.

That would be yet another example of the rising inflation that is biting Australia’s economy and not being matched by comparable wage growth. That means the cost of living is getting higher.

The business community is divided over raising the minimum wage by 5.1 per cent in line with inflation.

Some say higher wages will hurt business further and make inflation even worse – which could lead to a so-called wage price spiral.

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