RBA Rejects Staff Pay Rise as Inflation Concerns Grow

The Reserve Bank of Australia (RBA) has rejected its own staff's request for a pay rise that keeps up with inflation, just hours after announcing an interest rate hike. This move is seen as contradictory to RBA Governor Michele Bullock's statement that Australian workers are suffering real wage cuts due to rising costs and stagnant wages.

The RBA offered a 9.5% pay rise over three years, split between 3.7%, 3%, and 2.8% in subsequent years. However, staff requested increases of 11% over three years or in line with inflation, whichever is higher. They also sought work-from-home protections and backpay for the current pay period.

The RBA's rejection of these requests has left staff feeling incensed, with some viewing it as an attempt to pressure them into accepting a worse deal. The union representing staff has warned that if the offer is not supported, staff may miss out on months of higher pay and could even quit their jobs in search of better opportunities.

The RBA's decision comes at a time when labour costs across the economy are rising by 3.5%, adding to inflationary pressure. Bullock has previously warned that unit labour costs above the target rate of 2.5% pose a risk to bringing down inflation.