TECHNICAL AND SERVICES BRANCH WEEKLY BULLETIN 2022
3 April 2022
THE BUDGET AND CPI
The Government expects the CPI to rise to 4.25% by June this year - well above wages - meaning a real cut in wages again this year. To stand still, workers need a 4.25% Wage increase this year. And some more to catch up. Some analysts expect the CPI to be exceed 5%. The Budget also explains that wages will fall behind the 4.25% CPI prediction. Then there is a promised rise in interest rates.
But thanks to the miracle that Scomo believes in, wages might overtake CPI downstream. We are true believers, not idiots.
ACTU SEEKS 5% WAGE INCREASE
From the ACTU: What would a wage rise mean to you?
For millions of workers around Australia, the answer is: everything.
That is why the ACTU has made a submission to the Annual Wage Review
on behalf of all Australian workers that argues for a 5% increase.
And we are calling on Scott Morrison to support our claim.
A 5% increase in the minimum wage would mean lifting the hourly rate to
$21.35 for the 1age is what is needed for Australian workers
to keep their heads above water.
If any member has been significantly affected by the NSW Floods, please contact us. Our union may be able to assist.
TELSTRA CEO - HOW WILL HE BE REMEMBERED?
The following is an extract from Supratim Adhikari Deputy Business Editor - The Bulletin
Andrew Penn will walk out of the top job at Telstra having overseen more than $20 billion wiped off the telco's books. Telstra's shares were trading north of $6.50 when Penn took the reins in May 2015 and are now at $3.90 - down almost 40% over his tenure.
The numbers are terrible, any way you slice it, and Penn has also presided over Telstra cutting its rock-solid dividend payout, not once but twice. First in 2017, when the annual dividend was cut from 31 cents per share to 22 cents per share, and again in 2019, when it was reduced to 16›.
Along the way, thousands of workers, along with a host of senior executives, have been shown the door as part of Penn's quest for a leaner, meaner Telstra.
Now that may seem a rather uncharitable report card for Penn, but the value destruction at Telstra is not something he can walk away from. Fortunately for him, this won't be the legacy he will leave behind when he officially steps down in September.
Instead, it will be that of a CEO forced to undertake the sort of fundamental remodelling of a business that can make or break a company. A `Kodak moment', if you will, where a storied behemoth chooses to either face up to the pain or persist into indifference.
Penn's moment came with the Telstra 22 (T22) strategic restructure, announced in mid-2018, that cut the telco's workforce of some 30,000 employees by a third, took $2.5 billion of costs out of the business, and a back-end technology simplification that has helped Telstra cut its roster of available mobile plans from 1800 to 20.
But T22 hasn't been an easy sell to investors, especially retail shareholders that have seen their dividend payments shrink and must reconcile themselves to the reality that Telstra will never deliver the growth it once did.
And it's on that reform front, where Penn wins his plaudits.
Telstra may not have completely exorcised the demons of being an incumbent that was overtaken by the disruptive forces unleashed by the NBN, the primacy of internet giants and changing customer behaviour. But it's in a much healthier shape than what Penn inherited.
T22 has been largely successful and Telstra is not only in a position to reassert its dominance in the mobile market, thanks to its investment in 5G, but has also got the framework in place to spin its fixed infrastructure assets into an asset that ends up running the NBN.
TELSTRA EBA - WAGE OFFER NOT ENOUGH
CPI and Telstra's EBA wage offer - 2.5% (October 2022) and 3% (October 2023) is not enough!
Analysis of the official CPI figures over the last 2 years (i.e. from the March 2020 2.2% quarterly CPI figure) show a significant trending increase in the last 3 quarterly periods (June 21, Sept 21 and December 21). The effects of the Covid epidemic clearly reversed the rate of CPI in the period from the June 2020 quarter through to the March 2021 quarter, but significant worldwide events are building up to a major inflation outbreak. This coincides with the time when Telstra have offered a woeful pay increase of 2.5% in October 2022, and 3% in October 2023.
The rate of increase that is projected internationally has the EU running around 5%, and USA running around 6.5% for the December 2021 figures.
Headlines in the local financial media, as well as a basic extrapolation from the published CPI graph by the Australia Bureau of Statistics, have the next 2 published quarters likely to show projected CPI figures of around 4.5% in March 22 (let's see what it looks like in a week or so!), and potentially 6% in the June quarter. This could rise even further by the December quarter this year, and may well even be up around 8%.
Telstra's offer needs to be examined in this context. Telstra's report to the Share Market, which was published last week, shows an upbeat outlook.
If we are to have inflation (i.e. your buying power) running at 6-8% matched by a woeful 2.5% pay offer from a successful telecommunications company it is clear who Telstra are looking after, and it's not the workers. Plainly with these sorts of numbers, cost of living has already swamped any pay offer.
By the time our proposed next 2.5% pay increase materialises, Telstra staff are likely to be going backwards in their buying power by a significant amount.
Transport and fuel costs, interest rate rises, food costs etc. will make life pretty difficult for the average worker.
Despite Management claims of "industry leading conditions" we are getting reports from our members of staff leaving for higher paid jobs in other parts of the industry.
As such, we are yet to be convinced that this pay rise proposal is "industry leading".
Telstra, let's get something reasonable on the table, and look after your staff when it comes to the most important part of their life at Telstra - reasonable pay and conditions.
Yours in solidarity, JOHN ELLERY
Authorised by Dan Dwyer NSW Secretary, Sue Riley Vic Secretary
- CWU Telecommunications & Services Branches.