3m workers get 4.75pc pay rise; Kmart takes on IKEA; 3.5m Insta followers in 48 hours
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What is the main topic discussed in this episode?
Welcome to Fear and Greed, business news you can use.
What is the significance of the 4.75% pay rise for workers?
Today, almost 3 million workers will receive a pay rise of at least 4.75%, but economists warn the increase could lead to higher interest rates. An activist investor takes on Australia's biggest gold stock, and Kmart takes on IKEA in homewares. Plus, insurers report a doubling of requests for EV coverage, and the Kiwi footballer, whose Instagram account went from less than 5,000 followers... to $3.5 million in two days. It is Wednesday, the 3rd of June, 2026.
How will the pay rise impact inflation and interest rates?
I'm Michael Thompson, and good morning, Sean Aylmer. Good morning, Michael. Sean, the main story this morning, almost 3 million workers will get a pay rise of 4.75%, and minimum wage workers will have their remuneration increased to just over $1,000 a week after a Fair Work Commission ruling yesterday. The decision, which has implications... really for employees, for employers, for interest rates, for the health of the economy. It came after the union movement called for a 6% increase and business groups called for an increase of between 3.5% and 4%.
So in the end, the commission upped the wage of 100,000 workers on the very minimum amount by nearly 6% and the 2.9 million workers by 4.75%.
What are the implications of Kmart's competition with IKEA?
In total, 21% of the workforce is directly affected. A lot of those people are in healthcare, in retail, accommodation and food services, administration and support. Justice Adam Hatcher from the commission said the wild card, that's how he put it, of the Middle East conflict and its impact on inflation prevented a bigger rise, but he said the decision was particularly challenging given the ongoing cost of living crisis. The rise ensures that award employees are not worse off in real terms Then back on July 1 last year, that's because the Fair Work Commission has used the Reserve Bank's forecast of 4.8% inflation in the year to June as a benchmark. That's how it came up with its number.
What factors are driving the increase in EV insurance requests?
The previous increase was 3.5% for the current financial year. Inflation's running at 4.2%. So this financial year looks like there'll be a cut in real wages, and that's what the Fair Work Commission is trying to avoid here. Both sides of politics welcomed the decision, though they very much put their own spin on it.
There's a bit to unpack in all of this, Sean.
How has a Kiwi footballer gained 3.5 million Instagram followers?
The big question from all of it, I suppose, is what it means for inflation and then for interest rates. But something there that you said about the wildcard of the Middle East conflict and its impact on inflation preventing a bigger rise. Does that mean then that the Fair Work Commission is actually taking into account the potential inflationary impact of the minimum wage increase? Because I would have thought that the role of the Fair Work Commission would have been to ensure that the workers themselves are being looked after. And if inflation is potentially going up because of the Middle East, then the Fair Work Commission has to increase the minimum wage to ensure that workers can survive.
Yeah.
What challenges is Northern Star facing from activist investors?
No, it has a broader ambit. So it's exactly as you started that last minute discussion, which I was following most of, Michael. The point is that it is worried about inflation and it has made a decision to keep it at 4.75%, not more, because it doesn't want to play a role in letting inflation get out of control.
Okay. Is it going to make a difference to what the Reserve Bank thinks?
So the view among economists is it probably won't make a huge difference in the near-term inflation outlook. It applies to minimum wage workers, about 20% of the workforce. However...
What are the latest developments in US-Israel relations amid conflict?
if as is very possible the 4.75 percent becomes the benchmark for broader wage setting across enterprise bargaining agreements then there could be a problem so you could imagine unions and workers going to their bosses and saying well look the minimum wage went up by 4.75 percent surely our wages should go up by 4.75 percent if that happens if this goes broader then there is definitely an inflationary problem. In fact, the team at AMP is so worried about the spillover effect into the private sector, they're now forecasting two more rate rises this year, not one.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:06–0:09
2
What is the significance of the 4.75% pay rise for workers?
0:09–0:41
3
How will the pay rise impact inflation and interest rates?
0:41–1:31
4
What are the implications of Kmart's competition with IKEA?
1:31–2:14
5
What factors are driving the increase in EV insurance requests?
2:14–2:37
6
How has a Kiwi footballer gained 3.5 million Instagram followers?
2:37–3:19
7
What challenges is Northern Star facing from activist investors?
3:19–3:59
8
What are the latest developments in US-Israel relations amid conflict?
3:59–19:58
Speakers
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