Big inflation pressures yet to come – CTU says

major inflation pressures on working people are yet to come, the Council of Trade Union said today.

However a 2 percent increase in the cost of living – which is an unchanged annual figure – still highlights the situation of those who have not had any increase in income over the past year.

“Although more and more workers are getting pay rises, there are some who have missed out, yet they have seen the cost of living rise,” said CTU Economist Bill Rosenberg. “In a number of workplaces hours have been cut back and this has also affected take-home pay.”

“The increase in food prices of 1 per cent in the March quarter alone and over 10 percent in the last two years has had a damaging impact on low income families.”

Rosenberg says that the big lift in inflation will occur should the Government increase GST in October. That is predicted to bump annual CPI announced in January 2011 to between 4.5% and 5%. Despite promises that workers will be compensated by tax cuts for the increased cost of living, there is a risk of highly unfair outcomes in the tax package, and this will mean that as skill shortages emerge in 2011, workers facing increased living costs will be seeking fair wage adjustments.