Australian Prime Minister Scott Morrison (right) and Australian Opposition Leader Anthony Albanese shake hands during the third leaders' debate
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Scott Morrison and Anthony Albanese have clashed on the cost of living, wage increases and border protection in the third leaders’ election debate. 

The leaders locked horns over wage increases in the early stages after Mr Albanese on Tuesday said he would ‘absolutely’ support the Fair Work Commission hiking the minimum wage by 5.1 per cent in line with inflation.

Mr Morrison blasted the Labor leader for being ‘loose with the economy’ and said such a large increase would stoke price rises further.

Australian Prime Minister Scott Morrison (right) and Australian Opposition Leader Anthony Albanese shake hands during the third leaders' debate

Australian Prime Minister Scott Morrison (right) and Australian Opposition Leader Anthony Albanese shake hands during the third leaders’ debate

‘You’ve got to understand how the economy works, and if you just say 5.1 per cent and try to jawbone the Fair Work Commission, that puts Australia’s economy at great risk and we can’t afford that sort of lack of understanding about how our economy works,’ the PM said.

Mr Albanese stood by his position, saying an extra dollar an hour for people on the $20.33 minimum wage would not damage the economy.

‘The idea that two cups of coffee a day is something that would damage the economy is, I believe, just not the case,’ he said. 

‘We need to look after people who are vulnerable. We need to do more than say thanks very much for everything you did in the pandemic but now we are going to cut your wages.’

Australian Opposition Leader Anthony Albanese laughs during the third leaders' debate

Australian Opposition Leader Anthony Albanese laughs during the third leaders’ debate

Mr Morrison (right) looked determined throughout the debate in the Seven studios

Mr Morrison (right) looked determined throughout the debate in the Seven studios

But the Prime Minister hit back, saying small businesses would not see it that way and may have to lay people off if wages go up too much.

‘Well, if Mr Albanese thinks small businesses around the country can have a five per cent increase in their wages bill on top of all the other things they’re facing then people won’t be worrying about what their wages are, they will be worrying about whether they have a job.’ 

The debate came after a new poll published in The Australian newspaper predicted Labor will win a comfortable majority with 80 seats.  

Next the pair clashed over character – with Mr Morrison laying into his opponent and calling him a ‘loose unit’.

‘This is a Labor leader who comes from the far left of the party and has been very loose, he is a loose unit when it comes to the economy. 

‘He makes things up as he goes along. The policies he comes up with he doesn’t think through,’ the Prime Minister said, pointing out the Mr Albanese did not know the unemployment rate on day one of the campaign.

Mr Morrison said Labor’s help to buy housing scheme where the government would take a stake in people’s home would force them to sell if they earned over the $90,000 salary threshold. 

Mark Riley hosted the debate on the Seven Network. The showdown kicked off at 9.10pm

Mark Riley hosted the debate on the Seven Network. The showdown kicked off at 9.10pm

Meanwhile, Mr Albanese said the Prime Minister ‘never takes responsibility’ and ‘blames the states’, blasting him over the slow Covid-19 vaccine rollout and the rapid test shortage.

‘He said he didn’t hold a hose in the bushfires, in the pandemic he said that it wasn’t a race to get vaccines. It was,’ the Labor leader said. 

Mr Morrison admitted he has not got everything right during his four years in power. 

Next the leaders clashed over border protection, with Mr Albanese insisting Labor supports offshore processing and boat turn-backs – despite opposing them earlier in his career.

‘Here we see a good idea we will support it, and that stands in stark contrast with this government in its approach,’ he said.

But the Prime Minister said Labor would not have the ‘stomach’ to turn away refugees.

‘Do you trust the people who have always believed in it, or do you trust someone who was for it and against it, for it and against it? Mr Albanese has been a complete weather vain on border protection,’ he said.

Mr Albanese is pictured during the debate

Mr Albanese is pictured during the debate

‘He was vehemently opposed to it, he said he couldn’t ask someone to do something that he couldn’t do himself. So I just don’t believe he has got the stomach for it if he were to become prime minister.’ 

Both leaders ruled out a carbon or mining tax during a section on climate change policy. 

In the next section on women and equality Mr Albanese spruiked his childcare policy which would increase subsidies for families on less than $530,000. 

‘Why do we do cheaper childcare? It’s not welfare, it’s economic reform. It will boost productivity, help business, help women’s retirement incomes,’ he said.

The Prime Minister said he had been ‘championing’ women throughout his time in office.

‘The gender pay gap has fallen from 17.4 per cent under Labor to 13.8 per cent where it is now, ‘ Mr Morrison said.

‘Female participation in the work force is at record levels.’

The Prime Minister said Labor’s plan to ultimately give a universal 90 per cent childcare subsidy was too expensive. 

‘It’s fine to make big promises, but you’ve got to be able to pay for them. We haven’t seen one policy costed by the Labor Opposition,’ he said.

The Labor leader said it was not just a cost but an ‘investment’ in gender equality and productivity.

Finally, the leaders revealed what they like about each other. Mr Morrison said he admired his opponent’s determination to rise to the top from his ‘humble’ housing commission beginnings.

Mr Albanese said he liked how the Prime Minister is talking about and funding mental health. 

Mr Morrison talked about the need to keep the economy strong in his opening speech.

‘You don’t want to risk a weaker economy. We have got big challenges and uncertainties still to face,’ he said.

Mr Albanese said he wanted a ‘better future’ where childcare is cheaper and Australia builds more renewable energy sources.

‘I believe that good government can change people’s lives for the better. 

‘I believe that good government can help people achieve their dreams and aspirations for a better future for themselves, their families and in particular generations to come,’ he said. 

Earlier on Wednesday Mr Morrison called Mr Albanese a ‘loose unit’ on the economy after he shocked Australia by supporting a massive 5.1 per cent increase in the minimum wage in off-the-cuff comments.

During a press conference on Tuesday, Mr Albanese said wages should ‘absolutely’ keep up with the 5.1 per cent headline inflation rate.  

The comment was immediately slammed by economists and business groups who fear such a big wage rise will stoke inflation and push household bills up even further.

This would mean the Reserve Bank could be forced to hike interest rates more than otherwise, pushing up mortgage payments for millions.

It could also increase unemployment because businesses may find it too expensive to employ as many people. 

Speaking in Newcastle on Wednesday, Mr Morrison slammed his opponent’s comments and said he was not up to the job of running the country. 

‘Mr Albanese showed yesterday that he is a complete loose unit on this stuff. He just runs off at the mouth,’ he said.

‘It is like he just unzips his head and lets everything fall on the table.’

Mr Morrison refused to say what level of wage increase he favours – instead insisting the independent Fair Work Commission be left to decide without political pressure. 

Mr Albanese in a press conference on Tuesday said wages should 'absolutely' keep up with the 5.1 per cent headline inflation rate

Mr Albanese in a press conference on Tuesday said wages should ‘absolutely’ keep up with the 5.1 per cent headline inflation rate

The Prime Minister accused Mr Albanese of ‘throwing fuel on the fire of rising interest rates and rising cost of living’. 

He said it was ‘no wonder’ the Labor leader has never held a financial portfolio in Government or Opposition.

‘He is like someone working in a small business who they won’t let near the till and the Australian people shouldn’t let him near the till,’ he said.  

‘Anthony Albanese says that he wants wages to go up by 5.1 per cent and he thinks that Australians don’t know what the impact of that would be on their interest rates, on unemployment, or on inflation and the cost of living.

‘He thinks Australians don’t get the link between these things. He thinks he can just say what he likes and you can have your cake and eat it. That is not how you run sensible, sound, responsible economic policy.’

Mr Morrison said favouring such a big wage increase will see Australia return to the wage price spiral of the 1970s which soar interest rates hit 18 per cent. 

‘If you vote Labor, [you will have] a leader who can make interest rates worse, who can make inflation worse,’ he added. 

Speaking in North Sydney, Mr Albanese stood by his position.

Prime Minister Scott Morrison solders during a visit to The Melt Prototyping and Innovation Accelerator in Newcastle on Wednesday

Prime Minister Scott Morrison solders during a visit to The Melt Prototyping and Innovation Accelerator in Newcastle on Wednesday

‘We are talking about cleaners, we are talking about retail workers. We are talking about people really struggling to get by.

‘It is not enough to say thank you for what you did getting us through the pandemic and then saying we want to cut your real wage. That is what Scott Morrison is saying.’ 

The Australian Industry Group wants a ‘modest’ wage increase of two per cent, fearing anything more will cripple small businesses.

Gareth Aird, Head of Australian Economics at Commonwealth Bank, said wages growth above the Reserve bank’s three per cent inflation target band meant ‘rate hikes to get it back down’.

‘In short, wages growth of 5.1 per cent all else being equal means higher interest rates than otherwise and the pain lands on those with a mortgage,’ he said.

Underlying inflation – which removes very volatile temporary price shifts – was 3.7 per cent in April. 

Wage growth was 2.3 per cent in the most recent data to the end of 2021.

The minimum wage in Australia is $20.33 an hour. It gets reviewed every year, with a decision expected in June. Some 2.7million Aussies earn the minimum wage.

The Coalition believes the best way to prompt wage rises is to keep down unemployment – currently at just four per cent.

Liberal Senator Anne Ruston said: ‘Around a million people just in the last couple of months of last year changed jobs and they changed jobs for a pay increase of somewhere between eight and 10 per cent. 

‘That only happens when unemployment is exceptionally low.’

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