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The battle over Labor leader Anthony Albanese’s “absolute” backing to a minimum wage increase is heating up.

The contrast between flat wages and growing cost of living is growing ever more central to the current campaign, with unions calling for a 5.5 per cent increase in the minimum.

“I believe that the minimum wage should at least keep up with the cost of living,” Albanese said yesterday.

Opposition Leader Anthony Albanese supports a minimum wage increase.. (9News)

Asked directly if he would support a 5.1 per cent minimum wage increase, the same as the rate of inflation, Albanese said: “Absolutely.”

He backed that up today, while clarifying he did not endorse it as an ongoing policy – only a measure of support for those currently doing it tough on minimum wage.

The business community has criticised the move, saying it will only put further pressure on inflation.

“What we’re talking about here is the lowest-paid workers in Australia,” Albanese said.

“Those people who are really struggling with cost of living increases.”

He said the increase amounted to an extra $1 an hour for people earning $20.33 an hour.

Additionally, Labor’s plan was not to continue increasing minimum wage in line with potential inflation rates of seven per cent or more.

“To grow productivity the way that you can have wages increase and profits increase whilst not putting inflationary pressure there, is productivity growth,” Albanese said.

“And that was the centre of my speech to the Australian Chamber of Commerce and Industry last Thursday, that’s my position.”

But critics – most prominently Prime Minister Scott Morrison – said increasing wages would only increase hip pocket pain.

Morrison called Albanese’s decision “incredibly reckless”.

“We all want to see wages go up and indeed the Reserve Bank governor has made it very clear that we are seeing wages starting to go up,” he said.

“But the way you engage in economic policy is not in the loose way we saw from Anthony Albanese yesterday.”

Morrison said Fair Work Australia was the appropriate body to determine wage increases.

“The risk is, if you add to the cost of doing business, you’ll add to the cost of inflation,” Andrew McKellar from the Australian Chamber of Commerce and Industry said.

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“That’s going to push the cost of living higher.”

Independent Senator Jacqui Lambie yesterday accused both major parties of essentially ignoring cost of living pressures, especially on pensioners.

She said power prices hikes had already seen people forgoing lunch or dinner to pay their bills, and that any increase in rent prices could see pensioners forced out of their homes altogether.

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