ACTU pushing 'above-inflation' wage increase in 2026 as real paypackets decline


Thu 5 Feb 2026
ABC News

ACTU Secretary Sally McManus has warned there will be strikes if workers' wages can not catch up.    

Australia's biggest employers are under pressure to give their workers pay increases above 4 per cent this year, as real wages go backwards and the union movement ramps up pressure.

"In order to just keep up, you need a 4 per cent pay increase," the peak union body's secretary, Sally McManus, told ABC News today.

"People are going to want to get ahead, and that means more than 4 per cent.

"There will be strike action if we can't get wages that will keep us ahead."
Australia's annual inflation rate is currently at 3.8 per cent, which came in so unexpectedly hot that it prompted the Reserve Bank of Australia (RBA) to hike interest rates this week.

The next round of inflation data is due out on February 25.

The RBA's latest forecasts, found in its Statement on Monetary Policy released on Tuesday, show the RBA is forecasting annual inflation growth to run faster than annual wage growth until mid-2027.

When inflation runs faster than wages, it means the "real" value of wages or purchasing power is deteriorating, corresponding to a real wage decline.

From mid-2027, the RBA is then forecasting wages to grow faster than inflation (real wage growth), which will see purchasing power improve again.


ACTU justifies 4 per cent figure on housing costs   
The Australian Council of Trade Unions (ACTU) says it will push for "above-inflation" pay increases in direct negotiations with major industries, as well as for the upcoming Annual Wage Review (AWR).

The AWR covers the minimum wage and industry minimum awards. Changes to this affect millions of workers, many of them female and part-time or casual workers.

Last financial year, the Fair Work Commission gave these workers an above-inflation boost of 3.5 per cent from July 2025. Inflation was running at 2.4 per cent at the time.

The ACTU is arguing that workers need more pay because housing costs are especially high.

"Landlords keep putting up rents," Ms McManus told ABC News today.

"Inflation there, or how much they're going up there, is 4 per cent.

"Your average worker is either a renter or they're a first home buyer and they're the ones under the most amount of cost-of-living pressure for a whole lot of reasons. Rents are part of it."

A close up of Sally McManus in the Insiders studio.
Sally McManus says the ACTU will push for strikes if employers don't offer wage increases.

The last round of inflation data showed housing inflation is at 5.5 per cent annually. This includes rents and home building costs but not the cost of buying property.

Broken down, rental inflation was at 3.9 per cent in the year to December, down from 4 per cent the month beforehand.

"Annual inflation for rents has eased over the past 12 months due to stable vacancy rates in most capital cities," the Australian Bureau of Statistics noted in its latest inflation data release.

The ABC has contacted major employers, including JB Hi-Fi, Kathmandu's owner KMD Brands, and Coles. So far, Woolworths and Myer both declined to comment.

Industry groups have also been contacted.

When pays and Centrelink go up.
The price of everything goes up.