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Category: Media Release

  • Rate rises are going to cause a housing affordability crunch

    Rate rises are going to cause a housing affordability crunch

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on May 5, 2022

    For most of the past decade the talk about housing affordability has focussed on house prices. As fiscal policy director, Greg Jericho notes in his Guardian Australia column, falling interest rates since November 2010 have made paying off a mortgage less onerous than it otherwise would have given the soaring house prices.

    But that is about to change.

    The signal that interest rates are going to rise by possibly 2.5% points over the next 18 months means that for new mortgage holders the cost of repaying a mortgage is going to be harder than ever before – harder even than when interest rates hit 17% in 1990.

    It is a hit that will only exacerbate standard of living problems as wages will struggle to keep up with the rising cost of of holding a mortgage – especially given the belief that wage rises need to be contained below inflation rises continues in economic debate.


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  • High inflation means real wages have plummeted

    High inflation means real wages have plummeted

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on April 28, 2022

    The March CPI figures showing that inflation rose 5.1% over the past 12 months is not just the highest level since the introduction of the GST it also signals the biggest fall in real wages since then as well.

    Labour market policy director, Greg Jericho, notes in his column in Guardian Australia that even if wages have increased by 2.5% in the next release (up from 2.3% in the 12 months to December) real wages will have fallen 2.5% in the past 12 months.

    That would mean real wages would be back at 2014 levels and barely above where they were when the LNP took office in September 2013.

    Worse still for low-income earners, in the past 12 months the prices of non-discretionary items rose 6.6%. For those whose income goes more towards paying essential bills than does the average household, the pain of these price rises has been much higher. Their real wages have likely fallen by more than 3% in the past 12 months.

    This is why any gloating about a recovery from the pandemic must be tempered to consider the reality of workers’ lives. It is not enough to point to lower unemployment if real wages are falling faster than they ever have outside of the introduction of the GST – especially for lower income earners.

    That is not a recovery; that is a failure.

    With interest rate rises now very much on the way, without wage rises that account for inflation and properly reward for increases in productivity, workers standard of living is set to fall and see them back where they were nearly a decade ago.


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  • Free Undergraduate Education to Save Universities and Jobs: Report

    Free Undergraduate Education to Save Universities and Jobs: Report

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    The next federal government can save universities, make undergraduate education free for all Australians and employ tens of thousands of staff securely by lifting the public spend on higher education to just one per cent of GDP, according to a landmark new report.

    The Australia Institute’s Centre For Future Work report shows, if the federal government brings its annual investment in higher education into line with the OECD average, we could fix the destruction inflicted by the COVID pandemic and make universities more accessible and affordable for all Australians.

    Following decades of funding cuts, government inaction and the pandemic, more than 40,000 jobs were lost in public tertiary education in the 12 months to May 2021, 35,000 of those at public universities.

    National Tertiary Education Union (NTEU) National President Dr Alison Barnes said “Higher education needs to be made a priority in this election. The future of hundreds of thousands of staff and millions of students depends on it.

    “The state of the sector now is deeply concerning. It is the consequence of the Morrison Government’s decision to exclude universities from JobKeeper, hike student fees, cut funding per student place, entrench casualisation and decimate curiosity-driven research funding.

    “Thousands of jobs have been lost at public universities and the staff who are left are being kept on casual or short-term contracts. Those staff can’t plan for their future and often have their pay stolen by money-hungry universities who have built their business models on wage theft and insecure work.

    “The next Australian Government could remove the financial barrier to higher education, employ more than 26,000 staff in secure full-time jobs, restore research funding, reduce the over-reliance on casual staff and establish a new higher education agency to improve governance.

    “Free undergraduate education would be transformative for current and future students who are now facing more expensive degrees, mounting student debt and even the threat of being kicked off HECS if they don’t pass their courses.”

    Australia Institute economist and the report’s author Eliza Littleton said “As devastating as the pandemic has been for Australia’s universities, the sector was being distorted and damaged by corporatisation, casualisation, and privatisation long before COVID arrived.

    “Australia needs an ambitious national vision for higher education that re-aligns the sector with its public service mission, and with the needs of students, staff, and wider society.

    “Australia can choose a future for higher education that facilitates a stronger economy, social mobility and enhanced democracy – all the while generating a source of high-quality careers for many thousands of Australians.”

    The report’s recommendations include: 

    • Free undergraduate education for Australian students
    • Adequate public funding for universities
    • Fully-funded research
    • Measures to ensure secure employment
    • Improved higher education governance
    • Caps on vice-chancellor salaries; and
    • Transparency in data collection.

    Related research



    At the Crossroads



    Full report

  • The election campaign needs to tackle climate change

    The election campaign needs to tackle climate change

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on April 21, 2022

    In the week before the election campaign began the IPCC released its latest report that contained warnings that deep, rapid and sustained emissions reductions are needed to prevent temperatures from rising 1.5C or 2C above pre-industrial levels.

    And yet, as policy director Greg Jericho notes in his column in Guardian Australia, the issue has been virtually ignored in the election campaign thus far – with most focus being on the “costs” of reducing emissions rather than a focus on the need to do so, or that the cost of renewable energy has fallen so far that “maintaining emission-intensive systems may, in some regions and sectors, be more expensive than transitioning to low emission systems”.

    There need to be a focus on the jobs in a low-emissions economy rather than a belief that Australia can keep avoiding the reality of climate change.


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    Dutton’s nuclear push will cost renewable jobs

    by Charlie Joyce

    Dutton’s nuclear push will cost renewable jobs As Australia’s federal election campaign has finally begun, opposition leader Peter Dutton’s proposal to spend hundreds of billions in public money to build seven nuclear power plants across the country has been carefully scrutinized. The technological unfeasibility, staggering cost, and scant detail of the Coalition’s nuclear proposal have

  • We (still) need to talk about insecure work

    We (still) need to talk about insecure work

    by Jim Stanford and Mark Dean in The New Daily

    Jim Stanford

    Mark Dean

    Laurie Carmichael Distinguished Research Fellow

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    Originally published in The New Daily on April 18, 2022

    Business groups and conservative media are happy to discuss insecure work as if it is nothing new – stable and part of a healthy economy that provides workers with independence. But this is not the case, with insecure forms of work – casual, gigs, temporary work and short-term contracts – taking up a growing share of jobs in Australia.

    Taking this perspective to task in a piece for The New Daily, Jim Stanford and Mark Dean discuss how a much broader range of forms of insecure work face many workers in Australia today, with the issue not getting any better. This is not even a trend created by unavoidable conditions created by the pandemic; it has rather been a deliberate outcome of the federal government’s labour market policies. Simply pretending it isn’t an issue won’t make it go away; nor will it provide us with sustainable solutions to the precarious situation that will keep facing more and more workers until the problem of insecure work is adequately addressed


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    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages

  • Universal Public Early Child Education in Australia Would Pay For Itself: Research Report

    Universal Public Early Child Education in Australia Would Pay For Itself: Research Report

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    Making Early Child Education and Care (ECEC) universal in Australia would pay for itself by unlocking women’s labour supply, boosting GDP and growing government revenues by billions, according to new research from the Australia Institute’s Centre for Future Work.

    With cost of living shaping up as a key election issue, policy experts say boosted funding would ease the pressure on families, while boosting the economy.

    Key Findings:

    • ECEC funding is lower in Australia than other countries, yet private revenues (mostly paid by parents) are higher. Australian parents currently pay more but get less
    • Matching the ECEC funding levels of Nordic countries would generate 292,000 new jobs, directly, downstream and via increased women’s employment
    • If Australian women had the same participation and full-time employment rates as Nordic women Australia’s GDP would be some $132b per year higher
    • Government funding for public and non-profit childcare generates one-third more employment and GDP than funding for private for-profit firms
    • The economic activity supported by expanded funding for public and non-profit ECEC centres would boostAustralian GDP by a further $35b
    • The combined boost to GDP would create an additional $48b in government revenue, more than the cost of providing the childcare services in the first place

    “This is a program that literally pays for itself,” said report author and Senior Economist at the Australia Institute, Matt Grudnoff.

    “This would create tens of billions of dollars in new GDP, hundreds of thousands of jobs and billions of dollars in government revenue – above and beyond the cost of providing those services in the first place.

    “A high-quality, accessible, and non-profit Early Child Education and Care system would facilitate the expanded paid work effort of hundreds of thousands of Australian women, helping close the gender pay gap.

    “At a moment when employers are complaining about a labour shortage, there is an obvious answer: support hundreds of thousands of women to increase their labour supply.

    “Expanded ECEC must be done right, to maximise the potential economic and social benefits. Funding must be directed to not-for-profit and public centres which put top priority on quality – not subsidising the profits of private investors who see children as a profit centre, not a social priority.

    “Childcare is a significant cost-of-living issue for many families with many spending more on childcare than groceries or utilities.

    “This is one of the smartest investments we could make for parents, for employment and for our society. It’s a no-brainer.”

    The report, The Economic Benefits of High-Quality Universal Early Child Education compared ECEC funding levels in Australia to other OECD countries.

    The below table summarises the combined impacts on GDP and tax revenues (for all levels of government) from the increase in labour force participation and full-time work by women, and the direct and indirect jobs associated with ECEC supply.


    Related research



    The Economic Benefits of High-Quality Universal Early Child Education



    Full report

  • House prices means interest rates do not need to rise much to inflict great costs

    House prices means interest rates do not need to rise much to inflict great costs

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on April 7, 2022

    The more than a decade long period of the Reserve Bank going without raising interest rates looks set to end. Rising inflation and the unwinding of the pandemic restrictions and border closures means that the emergency cash rate of 0.1% will soon go up. But at the moment the market expects before the end of next year that it will rise to above 3%.

    But while that may have been a neutral rate in the past, the Centre’s Fiscal and Labour Market Policy Director Greg Jericho, notes in his column in Guardian Australia, recent surges in house prices means such a rise would place an extreme burdon on mortgage payers – one not conducive to an economy still in recovery. 

    It took nearly 6 years during the mining boom for the RBA to raise the cash rate by 300 basis points; currently the market anticipates the same rise occurring in 17 months.

    That would massively limit economic growth for little purpose at a time when wage rises remains below inflation, and rather unlikely to occur given the Reserve Bank’s recent hesitancy to slow the economy until real wage again start rising.


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    Dutton’s nuclear push will cost renewable jobs

    by Charlie Joyce

    Dutton’s nuclear push will cost renewable jobs As Australia’s federal election campaign has finally begun, opposition leader Peter Dutton’s proposal to spend hundreds of billions in public money to build seven nuclear power plants across the country has been carefully scrutinized. The technological unfeasibility, staggering cost, and scant detail of the Coalition’s nuclear proposal have

  • A slap-dash budget revealing a government with no idea why it is in power

    A slap-dash budget revealing a government with no idea why it is in power

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on March 31, 2022

    This year’s budget was transparently targeted towards the May election.

    But as Fiscal and Labour Market Policy Director, Greg Jericho notes in his Guardian Australia column, the slap-dash and short-term nature of the measures reveals this government has lost any real reason for governing.

    From the extra bonus of the low-middle income tax offset with no taper, which is now being used by businesses to argue against raising the minimum wage and the relative lack of concern about those in poverty while trying to exist on JobSeeker, this budget has all the hallmarks of an effort made up at the last minute and where poll numbers were more important than any economic figures.


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    Commonwealth Budget 2025-2026: Our analysis

    by Fiona Macdonald

    The Centre for Future Work’s research team has analysed the Commonwealth Government’s budget, focusing on key areas for workers, working lives, and labour markets. As expected with a Federal election looming, the budget is not a horror one of austerity. However, the 2025-2026 budget is characterised by the absence of any significant initiatives. There is

    Dutton’s nuclear push will cost renewable jobs

    by Charlie Joyce

    Dutton’s nuclear push will cost renewable jobs As Australia’s federal election campaign has finally begun, opposition leader Peter Dutton’s proposal to spend hundreds of billions in public money to build seven nuclear power plants across the country has been carefully scrutinized. The technological unfeasibility, staggering cost, and scant detail of the Coalition’s nuclear proposal have

  • Alison Pennington: Budget billions wasted as real wages go backwards

    Alison Pennington: Budget billions wasted as real wages go backwards

    by Alison Pennington in The New Daily

    Alison Pennington

    Senior Economist

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    Originally published in The New Daily on March 30, 2022

    The federal government’s budget would have us believe that the cost of living is a sudden problem because of higher oil prices.

    But the real reason people are feeling the pinch is because their real wages are going backwards.

    The budget forecasts wage growth of 2.75 per cent in 2021-22, below inflation which is forecast to grow by 4.25 per cent. That’s a real wage cut of 1.5 per cent.

    The budget will increase the low-and-middle-income tax offset, but then scrap it at the end of this financial year. The fuel excise will be reduced for six months.

    Complex tax-bracket-shifting schemes are a good way to distract from powerful wage suppression policies. While we’re calculating “how much do I get”, these policies entrench insecure work, cap public sector pay, and stop collective bargaining. These measures hit workers every pay packet, not just at tax time.

    The amount workers get from the tax cuts is nothing compared to normal wage increases. For the 15 years to 2012, private-sector wages grew about 3.5 per cent per year. For someone on $70,000, that’s about $2500 more in one year.

    Distracting the income-strapped

    This budget is about trying to distract the income-strapped with temporary solutions that do nothing to help in the long-run. Alongside time-bound tax cuts are $250 one-off payments to income support recipients – thousands of people who permanently languish below the poverty line.

    The government is also hoping people believe in magical free-market fairies – that lower unemployment will finally unlock wages growth. As though holding a job automatically equips workers with bargaining power.

    The “record funding” fairies were out in full force, too. The Treasurer says “record funding” has been allocated in schools, hospitals, mental health, aged care, women’s safety and disability health. But if you reduce spending to rock-bottom, every marginal increase in spending with population growth can be called “record funding”.

    If it’s not enough funding to meet demand, then it can still be “record funding” for some. Shockingly, public school funding will be cut by $560 million over the next three years. Meanwhile, JobKeeper-subsidy-dripping private schools will get $2.6 billion more over the forward estimates. It’s not a budget without blows.

    Cuts to workers’ pay

    Worse, this budget signals more cuts to workers’ pay. The budget has earmarked reducing legislated minimum redundancy payments for part-time workers. This will disproportionately affect women.

    Women’s chronically low wages and poor job quality receive no attention. Hundreds of thousands of women in underfunded healthcare and social services need government to front up and fund their pay increases. This budget is proof the biggest barrier to Australian women’s progress isn’t glass ceilings, but their own government.

    This government will balls up any opportunity to address structural gender inequality. A new paid parental leave (PPL) scheme will combine the paltry two-week Dad and Partner Pay with the existing 18-week program for a combined 20 weeks. Packaged as empowering “family choice”, it will remove any incentive for fathers to take leave.

    PPL payment at minimum wage will continue to push women into primary caring roles. This is because men earn almost one-third more than women on average. That’s not women’s “choice”.

    Governments have wage-booting tools to deal with the higher cost of living. Across the ditch, New Zealand just increased the minimum wage by 6 per cent, recognising its frontline lowest-paid workers have offered the most in the pandemic, and been hit the hardest.

    Genuine cost-of-living help overlooked

    Along with boosting minimum wages, there are other options for helping workers deal with high inflation. The government could lower the cost of living by ending fee-for-service practices in all the areas they fund – child care, aged care, and disability care. Under the current government, out-of-pocket healthcare costs have increased almost three times more than CPI.

    And there’s not much hope for youth in this budget. Presented with a future of declining living standards, political dysfunction and ecological catastrophe, young people are given just $206 million in mental health funding. They can talk to someone on the phone while the world burns.

    The bottom rungs on the economic-opportunity ladder have been eliminated and youth can’t get up. Tens of thousands of educated capable youth languish in dead-end jobs. Sacrificed by a government that would rather turn unemployment into a misery industry than to create secure, career-building jobs.

    Billions of waste

    The government is wasting billions of dollars paying off their friends in business without conditions to invest in higher wages. Before this Budget, $291 billion in public spending was ploughed into a “business-led recovery” from COVID. On businesses responsibility to reinvest post-war record-high profits, there’s an eery silence.

    And in this budget, we have zero assurances new business subsidies will be invested in the real economy – people, capital, research – rather than more profit-padding.

    On budget eve, Morrison attempted to hat-tip a bygone conservative era. He said “families” will be key to winning the upcoming election. But he never invested in them, instead putting them in a pressure cooker of record-low wage growth and high living costs.

    The government was struck by enormous luck this budget. Extra revenue to play with and they’ve thrown it all away. Hundreds of billions in government spending and no era-defining economic reforms.

    Cos-of-living pressures wouldn’t be as acute if people had almost a decade of normal wages growth. But the truth is, the government has pursued wage suppression over the entire nine years it has been in power.


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    Commonwealth Budget 2025-2026: Our analysis

    by Fiona Macdonald

    The Centre for Future Work’s research team has analysed the Commonwealth Government’s budget, focusing on key areas for workers, working lives, and labour markets. As expected with a Federal election looming, the budget is not a horror one of austerity. However, the 2025-2026 budget is characterised by the absence of any significant initiatives. There is

  • A short-term budget with no vision or coherency

    A short-term budget with no vision or coherency

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on March 29, 2022

    The 2022-23 budget is one of the most shameless election year budgets in memory.

    With the opportunity to use windfall gains in revenue to begin the fix of structural issues in the economy dealing with the low paid and essential services, the government instead has thrown money at voters in the hopes of re-election.

    The Centre’s Fiscal Director, Greg Jericho, goes through the budget numbers and finds that despite predictions of once again strong wage growth, the underlying assumptions are overly optimistic and would even still leave workers worse off than they were in the middle of 2019 until 2025.

    The budget forecasts are for strong growth now, while the money is being pumped out, but once that ends we find yourself back with the same middling growth we had prior to the pandemic.


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    Commonwealth Budget 2025-2026: Our analysis

    by Fiona Macdonald

    The Centre for Future Work’s research team has analysed the Commonwealth Government’s budget, focusing on key areas for workers, working lives, and labour markets. As expected with a Federal election looming, the budget is not a horror one of austerity. However, the 2025-2026 budget is characterised by the absence of any significant initiatives. There is