SYDNEY: Australia has stopped printing bank notes for the first time in a century after workers employed by a unit of the central bank 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 per cent to achieve average inflation of 2.5 per cent, 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 per cent pay rise, rather than the industry average rate of 2 per cent 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.”
The last time wages grew as fast as 3.5 per cent was in the third quarter of 2012.
Piccolo said this is the first time in 107 years the printing of Australian banknotes has been interrupted by industrial action.
The RBA declined to comment on an ongoing matter, including on whether the strike would have any impact on the availability of currency.
Piccolo said the union is prepared to extend the strike if the NPA management did not return to the ‘bargaining table’ next week.
NPA has its only printing facility in Melbourne. Apart from Australian bank notes, it also prints currencies for other central banks using its polymer substrate technology, according to its website.
Customers include the Reserve Bank of New Zealand, Bank of Thailand, Bank Indonesia and Central Bank of Kuwait.
Its board includes senior RBA officials such as its chief financial officer, head of payments settlements and head of risk and compliance. RBA board member Kathryn Fagg is a non-executive director of NPA. — Reuters