SYDNEY (Reuters) - Australia has stopped printing bank notes for the first time in a century after workers employed by the Reserve Bank of Australia (RBA) took a lead from the bank’s governor and went on strike for a bigger wage rise.
With wage growth in Australia crawling around the slowest pace on record, Reserve Bank of Australia (RBA) Governor Philip Lowe recently called on workers to demand fatter pay hikes.
He told lawmakers that average annual wage increases need to be around 3.5 percent to achieve average inflation of 2.5 percent, the middle of the bank’s target.
Workers at Note Printing Australia (NPA), a wholly-owned subsidiary of the RBA, stopped work on Friday, demanding a 3.5 percent pay rise, rather than the industry average rate of 2 percent the central bank is offering.
“If it is so important to lift wages across the economy then here is a rolled-gold opportunity for the Reserve Bank to show some leadership,” said Tony Piccolo, regional secretary of print division at the Australian Manufacturing Workers’ Union.
“Governor Lowe needs to practice what he preaches.”
Piccolo said this is the first time the printing of Australian banknotes has been interrupted by industrial action in 107 years.
The RBA declined to comment on an ongoing matter.
The last time wages grew as fast as 3.5 percent was in the third quarter of 2012.
Reporting by Swati Pandey; Editing by Richard Pullin