Workers want pay rise: survey
By | theage.com.au | 20 May
Many employees believe they will need a pay rise of five per cent this year to stay ahead of rising living costs, a new survey shows.
But such rises could test the patience of the Reserve Bank of Australia (RBA), which is calling for wage restraint as a way of coping with inflation.
The RBA regards the present level of interest rates is appropriate given signs the economy is slowing, but it is wary of rising inflation feeding into excessive pay demands.
Economists say the central bank has long been perceived as having a 4.5 per cent line in the sand when it comes to pay hikes.
However a survey by job search site CareerOne.com.au shows 47 per cent of respondents believe they would need a five per cent pay rise to stay ahead of inflation.
Annual inflation is running at 4.2 per cent, already well above the RBA's two-to-three per cent target band.
"On the one hand, we have the Reserve Bank calling for wage restraint as a way of coping with inflation and, on the other, we have employees looking for wage increases to cope with inflation and the rising cost of living," CareerOne editor Kate Southam said.
"Petrol prices have gone up, rents have gone up, the cost of money has gone up, so it is a natural thing for you to expect a salary increase to cover that," she told AAP.
More than two-thirds of the 1,168 people surveyed expect to get a pay rise this year, while one third claimed they will look for another job if their pay demand is unsuccessful.
"Employers running to a financial year are working out their salary budgets now, so it is a message to employers that these are the expectations that you are going to come across in June," Ms Southam said.
However, the survey also shows employees are not taking advantage of tax initiatives that may be available to them to boost their present salary.
Almost 60 per cent of respondents said they did not salary package, despite two thirds saying their companies offer the service.
Of those who don't, 46 per cent did not know what salary sacrificing meant.
The survey also showed that more than half the respondents were not aware of tax-deductible expenses and of those, 60 per cent were not aware of what was claimable.
"Employers need to communicate and start communicating right now," Ms Southam said.
"Don't wait until June 30 when people have had their performance reviews and have heard they have done a very good job."
First published by TheAge.com.au on May 20 2008
Visit theage.com.au for the latest news updated throughout the day
