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Date Published : Tuesday, February 19, 2008
The federal government has urged big businesses to stop giving above inflation pay rises to its executives in a bid to curb the rising inflation levels throughout the country.
Earlier this week, prime minister Kevin Rudd announced that the pay awarded to all federal politicians will be frozen for 18 months - which, due to inflation, will actually mean they will get a pay cut.
As a result, deputy prime minister Julia Gillard has suggested that big businesses and corporations should follow the lead of politicians and reduce the pay rises handed out to the bosses or such companies, SBS World News Australia reports.
Currently, many big banks and financial institutions award above inflation pay rises for good performance or in the shape of bonuses.
Ms Gillard stated that if all companies reduce pay rises, that could help reduce the rapidly growing rate of inflation and, in turn steady the economy. She added that, if this was possible, interest rates would be likely to fall - affecting the vast majority of Australians.
"Part of what happened this week was politicians saying to the community we get it, we understand it, that there's a need for restraint and we are prepared to show that restraint ourselves through a wages freeze," Ms Gillard told ABC Television.
"It is people at the upper income end who can most easily show restraint and one of the reasons that the prime minister decided this week on the wages freeze is politicians are in that category."
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