Personally, I care not at all about the headline issue: At $528,000 a year, Turnbull’s pay is highest of any leader in OECD. PDT is not taking any salary at all so the price mechanism doesn’t always reflect relative value in any absolute sense. But this is what interests me:
The figures come as the Reserve Bank warns Australians to expect historically low levels of wage growth for some time yet, setting up a policy showdown with Labor before the next election over efforts to tackle the rising cost of living.
Both are trying to ameliorate the impact of torpid wage growth through offering billions of dollars in income tax cuts.
Workers have been starved of pay rises in real terms, with wage growth stuck at the rising cost of living for the past year. Inflation hit 1.9 per cent in March and private sector wages have barely kept up at the same rate but public sector workers have done better, lifting the rate to 2.1 per cent Australia-wide.
The reality is that both parties are deeply into Keynesian idiocies with some kind of belief that public spending makes an economy grow. I am not all that fussed about the deficit as such, but am very much concerned with the level of public spending which is almost invariably wasted. For every dollar spent, you get less than a dollar’s worth of value, often much less. That is why real wages don’t rise, and until that changes, real wages won’t either.
PDT understands that. Does anyone else?