Hockey tells business to accept high wages and forecasts competition policy reform under Coalition rule

Shadow treasurer Joe Hockey is expected to deliver a sobering confirmation today that the Coalition will do little to ease wage pressures for business.

In the speech, to be delivered around noon in Brisbane to the Committee for Economic Development of Australia, Hockey will say Australia must adapt to the current, high-wage economy, or risk falling behind.

The sentiments are likely to annoy business groups, especially the hospitality and retail industries, which have argued for months wages must be reduced in order for businesses to survive.

“We can compete with higher wages provided our output per worker is globally competitive,” Hockey will say.

He will say there is no national benefit in cutting wages and instead workers need to be properly trained in order to unlock potential productivity gains.

“Australia’s standard of living must not go backwards. There is no national benefit in cutting wages. What we need to do is to ensure our workers have the skills and knowledge that our industry needs. Education, training and retraining are a key step to unlock our productivity gains.”

SmartCompany contacted Federal Treasurer Wayne Swan, but he was unable to comment prior to publication.

Chief executive of the Council of Small Businesses of Australia, Peter Strong, told SmartCompany the Coalition is “scared of industrial relations”.

“It’s a funny thing for Joe Hockey to say. I think they’re scared of making any changes to industrial relations.

“Rather than wages, the biggest issue for us is penalty rates. We’re not against them as such, but the high rates are costing jobs,” he says.

Hockey will also signal potential competition policy reforms with regard to the duopoly of supermarket chains Coles and Woolworths and the impact of the price wars on suppliers.

“I particularly want to recognise the significance of recent comments by Terry Davis, the group managing director of Coca-Cola Amatil, who recognised as a major supplier to Coles and Woolworths, that a structural imbalance exists between the major supermarkets and suppliers and?that there is a need for a nat¬ional debate,” Hockey will say.

In comments to The Australian Financial Review, Davis said earlier this month Coles and Woolworths have “indisputable” market power and a debate was needed.

“They have responsibility to use that market power wisely and for the good of their shareholders but also the good of the communities they operate in, just as we have a responsibility to be a good corporate citizen in the communities we operate in,” Davis said.

Hockey is expected to also forecast Coalition improvements to the Fair Work system.

“We have already signalled that we will, within the framework of the Fair Work Act, look at cautious, careful and responsible improvements to labour market regulation to ensure better outcomes for workers and for business,” Hockey will say.

New Small Business Minister Chris Bowen recently hit back at opposition claims small businesses would have an easier time under a Liberal government.

“The Liberal Party which will reverse our small business tax cuts, the instant asset write-off and our loss carry-back policies, which are effectively tax cuts for small business, which Tony Abbott will rip up,” Bowen said speaking at a Google small business training program.

The Australian Financial Review further says Hockey will rule out any direct intervention to lower the value of the Australian dollar and acknowledge energy and wages as two of the biggest imposts on Australian businesses.

He is also expected to say he will have a tight fiscal policy in attempts to lower the dollar and promise to argue strongly in international forums for less state intervention in regards to currency values.