Economy

Two years of spending caps, additional work requirements for food stamps and cuts to I.R.S. funding are among the components in the deal.The full legislative text of Speaker Kevin McCarthy’s agreement in principle with President Biden to suspend the nation’s borrowing limit revealed new and important details about the deal, which House lawmakers are expected to vote on this week.The centerpiece of the agreement remains a two-year suspension of the debt ceiling, which caps the total amount of money the government is allowed to borrow. Suspending that cap, which is now set at $31.4 trillion, would allow the government to keep borrowing money and pay its bills on time — as long as Congress passes the agreement before June 5, when Treasury has said the United States will run out of cash.In exchange for suspending the limit, Republicans demanded a range of policy concessions from Mr. Biden. Chief among them are limits on the growth of federal discretionary spending over the next two years. Mr. Biden also agreed to some new work requirements for certain recipients of food stamps and the Temporary Aid for Needy Families program.Both sides agreed to modest efforts meant to accelerate the permitting of some energy projects — and, in a surprise move, a fast track to construction for a new natural gas pipeline from West Virginia to Virginia that has been championed by Republican lawmakers and a key centrist Democrat.Here’s what the legislation would do:Temporarily suspends the debt limitThe deal suspends the nation’s $31.4 trillion borrowing limit until Jan. 2025. Suspending the debt limit for a period of time is different than setting it at a new fixed level. It essentially gives the Treasury Department the latitude to borrow as much money as it needs to pay the nation’s bills during that time period, plus a few months after the limit is reached, as the department employs accounting maneuvers to keep up payments.That’s different than the bill passed by House Republicans, which raised the limit by $1.5 trillion or through March 2024, whichever came first.Under the new legislation, the debt limit will be set at whatever level it has reached when the suspension ends. For political reasons, Republicans tend to prefer suspending the debt limit rather than raising it, because it allows them to say they did not technically green-light a higher debt limit.The suspension will kick the next potential fight over the nation’s debt load to 2025 — past the next presidential election.Caps and cuts spendingThe bill cuts so-called nondefense discretionary, which includes domestic law enforcement, forest management, scientific research and more — for the 2024 fiscal year. It would limit all discretionary spending to 1 percent growth in 2025, which is effectively a budget cut, because that is projected to be slower than the rate of inflation.The legislative text and White House officials tell different stories about how big those cuts actually are.Some parts are clear. The proposed military spending budget would increase to $886 billion next year, which is in line with what Mr. Biden requested in his 2024 budget proposal, and rise to $895 billion in 2025. Spending on veterans’ health care, including newly approved measures to assist veterans exposed to toxic burn pits, would also be funded at the levels of Mr. Biden’s proposed budget.Legislative text suggests nondefense discretionary outside of veterans’ programs would shrink in 2024 to about last year’s spending levels. But White House officials say a series of side deals with Republicans, including one related to funding for the Internal Revenue Service, will allow actual funding to be closer to this year’s levels.Although Republicans had initially called for 10 years of spending caps, this legislation includes just 2 years of caps and then switches to spending targets that are not bound by law — essentially, just suggestions.The White House estimates that the agreement will yield $1 trillion in savings over the course of a decade from reduced discretionary spending.A New York Times analysis of the proposal — using White House estimates of the actual funding levels in the agreement, not just the levels in the legislative text — suggests it would reduce federal spending by about $55 billion next year, compared with Congressional Budget Office forecasts, and by another $81 billion in 2025. If spending then returned to growing as the budget office forecasts, the total savings over a decade would be about $860 billion.Speaker Kevin McCarthy has said he believes a majority of his conference would vote for the deal.Haiyun Jiang for The New York TimesClaws back I.R.S. fundingThe legislation takes aim at one of President Biden’s biggest priorities — bolstering the I.R.S. to go after tax cheats and ensure companies and rich individuals are paying what they owe.Democrats included $80 billion to help the I.R.S. hire thousands more employees and update its antiquated technology in last year’s Inflation Reduction Act. The debt limit agreement would immediately rescind $1.38 billion from the I.R.S. and ultimately repurpose another $20 billion from the $80 billion it received through the Inflation Reduction Act.Administration officials said on Sunday that they had agreed to reprogram $10 billion of extra I.R.S. money in each of the 2024 and 2025 fiscal years, in order to maintain funding for some nondefense discretionary programs.The clawback will eat into the tax collection agency’s efforts to crack down on rich tax cheats. It is also a political win for Republicans, who have been outraged by the prospect of a beefed up I.R.S. and approved legislation in the House to rescind the entire $80 billion.Still, because of the leeway that the I.R.S. has over how and when it spends the money, the clawback might not affect the agency’s plans in the next few years. Officials said in a background call with reporters that they expected no disruptions whatsoever from the loss of that money in the short term.That’s likely because all of the $80 billion from the 2022 law was appropriated at once, but the agency planned to spend it over eight years. Officials suggested the I.R.S. might simply pull forward some of the money earmarked for later years, then return to Congress later to ask for more money.New work requirements for government benefitsThe legislation would impose new work requirements on older Americans who receive food stamps through the Supplemental Nutrition Assistance Program and who receive aid from the Temporary Assistance for Needy Families Program.The bill imposes new work requirements for food stamps on adults ages 50 to 54 who don’t have children living in their home. Under current law, those work requirements only apply to people age 18 to 49. The age limit will be phased in over three years, beginning in fiscal year 2023. And it includes a technical change to the T.A.N.F. funding formula that could cause some states to divert dollars from the program.The bill would also exempt veterans, the homeless and people who were children in foster care from food-stamp work requirements — a move White House officials say will offset the program’s new requirements, and leave roughly the same number of Americans eligible for nutrition assistance moving forward.Still, the inclusion of new work requirements has drawn outrage from advocates for safety net assistance, who say it punishes vulnerable adults who are in need of food.“The agreement puts hundreds of thousands of older adults aged 50-54 at risk of losing food assistance, including a large number of women,” Sharon Parrott, president of the Center on Budget and Policy Priorities, said in a statement.President Biden also agreed to some new work requirements for certain recipients of food stamps.Pete Marovich for The New York TimesPermitting reformThe agreement includes new measures to get energy projects approved more quickly by creating a lead agency to oversee reviews and require that they are completed in one to two years.The legislation also includes a win for Senator Joe Manchin III of West Virginia, a Democratic centrist, by approving permitting requests for the Mountain Valley Pipeline, a natural gas project in West Virginia. The $6.6 billion project is intended to carry gas about 300 miles from the Marcellus shale fields in West Virginia across nearly 1,000 streams and wetlands before ending in Virginia.Environmentalists, civil rights activists and many Democratic state lawmakers have opposed the project for years.The bill declares that “the timely completion of construction and operation of the Mountain Valley Pipeline is required in the national interest.”Mr. Manchin said on Twitter that he is proud to have secured the bipartisan support necessary to “get it across the finish line.” Republican members of the West Virginia delegation also claimed credit.Student loans and unspent Covid moneyThe bill officially puts an end to Mr. Biden’s freeze on student loan repayments by the end of August and restricts his ability to reinstate such a moratorium.It does not move forward with the measure that House Republicans wanted to include that would halt Mr. Biden’s policy to forgive between $10,000 and $20,000 in student loan debt for most borrowers. That initiative, which the Biden administration rolled out last year, is currently under review by the Supreme Court and could ultimately be blocked.The bill also claws back about $30 billion in unspent money from a previous Covid relief bill signed by Mr. Biden, which had been a top Republican priority entering negotiations. Some of that money will be repurposed to boost nondefense discretionary spending.According to an administration official, the deal leaves intact funding for two key Covid programs: Project NextGen, which aims to develop the next generation of coronavirus vaccines and treatments, and an initiative to offer free coronavirus shots to the uninsured.Preventing a government shutdownThe agreement only sets parameters for the next two years of spending. Congress must fill them in by passing a raft of spending bills later this year. Large fights loom in the details of those bills, raising the possibility that lawmakers will not agree to spending plans in time and the government will shut down.The agreement between Mr. Biden and Mr. McCarthy attempts to prod Congress to pass all its spending bills and avoid a shutdown, by threatening to reduce spending that is important to both parties. If lawmakers have not approved all 12 regular funding bills by the end of the year, the agreement tightens its spending caps. Nondefense discretionary spending would be set at one percent below current year levels, and it is possible that the I.R.S. would not see its $10 billion in funding for next year repurposed for other programs.The same levels would apply to defense and veterans’ spending — which would be, in effect, a significant cut to those programs compared to the agreed-upon caps. Democrats see the looming military cuts as a particularly strong incentive for Republicans to strike a deal to pass appropriations bills by the end of the year.What’s not in the billThe final agreement includes far less reduction in future debt than either side proposed.Republicans wanted much deeper spending cuts and stricter work requirements. They also wanted to repeal hundreds of billions of dollars in tax incentives signed by Mr. Biden to accelerate the transition to lower-emission energy sources and fight climate change. Mr. Biden wanted to raise taxes on corporations and high earners, and to take new steps to reduce Medicare’s spending on prescription drugs. None of those made it into the deal. More

The writer is chief Emea economist at S&P Global Ratings This year marks 30 years of the European single market. In many ways, it has been a success and has driven significant economic growth across the region. However, it is not yet a full economic union. The banking and capital markets union is still incomplete — and this is holding the EU back. As a result, the free movement of goods and workers in the bloc is not being matched by the free movement of capital. Data shows that private capital flows across borders within the EU have not increased since the global financial crisis, with cross-border financial claims accounting for nearly 100 per cent of EU gross domestic product in 2022, the same as in 2007. What’s more, this private investment, driven by private savings, isn’t reaching the areas that really need it. Capital flows are moving within the north and the core of the EU, as investors perceive risk in eastern and southern Europe to be too high, despite better potential returns. In 2022, southern European countries received roughly 50 percentage points less financing from other European countries than in 2008. The growth of domestic savings pools across Europe appears at odds with this picture. Why is this a problem? The east and the south need investment to catch-up with the rest of the EU. Without such investment, the EU will not reap the full benefits of its single market. The current situation also limits the bloc’s ability to respond to external shocks, as the union remains financially fragmented. With some European countries staring down the barrel of a recession, it’s more important than ever that the union is resilient to shocks.There are two ways that the EU can solve this financing conundrum.First, it could fill the private investment gap with public subsidies, similar to the post-pandemic recovery Next Generation EU plan. Data shows that more public investment in developing regions can maintain appetite from private investors, although so far there is mixed evidence to suggest it can be increased. Years of cohesion and regional development funding have undoubtedly fostered economic growth in the south and the east of the EU, but they have barely improved capital markets’ perception of risk there, as intra-EU financial claims have stagnated since the global financial crisis. Therefore, to support the development of these regions, and to ensure that the bloc is resilient to further shocks, more public funding will be needed. The north and core of the EU will bear this cost — its scale is difficult to quantify and, for national leaders, it will be politically unpopular.Alternatively, the EU can decide to complete its banking and capital markets union. This would increase private risk sharing, making it easier for pools of private capital to be distributed to the countries that need it. It would help poorer EU countries avoid becoming ever more reliant on public transfers and it is also a cheaper solution. There is evidence that the EU can leverage private risk sharing within its original banking and capital markets union framework. While bond financing and bank lending to southern EU countries have diminished substantially — by 50 percentage points of the southern nations’ GDP since the global crisis, according to our calculations — cross-border equity has been a much more stable source of funding. Unfortunately, cross-border equity is also the most marginal source of capital. Cross border equity invested in southern EU economies accounts for less than 7 per cent of those countries’ GDP. So the capital markets union, which aims to promote equity financing, is a wise political choice.The rise of Luxembourg and Ireland, both small economies in terms of EU GDP, as hubs for cross-border funds, is another sign of hope. Thanks to a competitive legal and regulatory framework, Luxembourg has become Europe’s main location for undertakings for collective investment in transferable securities (UCITS) and alternative investment funds, with 27 per cent market share, ahead of Ireland (19 per cent).Of course, completing a banking and capital markets union is not easy. We have already made progress but we need to move forward before the next crisis. The less progress we make between now and the next crisis, the more likely it is that public risk-sharing will have to increase to absorb that shock.If there is another crisis, the governments of EU nations could be faced with a stark choice. Put more public money in to provide fiscal and monetary stimulus to support the bloc’s fragile economies. Or make the banking and capital markets union work. The EU’s stability and prosperity relies on such improvements. More

The debt-limit legislation includes a provision meant to force both sides to pass additional bills following through on their deal: the threat of automatic cuts if they fail to do so.The bipartisan legislation Congress passed this week to suspend the debt ceiling and impose spending caps contains an arcane but important provision aimed at forcing both sides to follow through on the deal struck by President Biden and Speaker Kevin McCarthy.The 99-page measure suspends the $31.4 trillion borrowing limit until January 2025. It cuts federal spending by $1.5 trillion over a decade, according to the Congressional Budget Office, by effectively freezing some funding that had been projected to increase next year and then limiting spending to 1 percent growth in 2025.But it also contains a number of side deals that never appear in its text but that were crucial to forging the bipartisan compromise, and that allowed both sides to claim they had gotten what they wanted out of it. To try to ensure that Congress abides by the agreement, negotiators used a time-tested technique that lawmakers have turned to for decades to enforce efforts to reduce the deficit: the threat of automatic, across-the-board spending cuts if they do not finish their work.Here’s how it works.A 1 percent cut unless spending bills are passed.Congress is supposed to pass 12 individual spending bills each year to keep the government funded. But for decades, lawmakers, unable to agree on those measures, have lumped them together into one enormous piece of legislation referred to as an “omnibus” spending bill and pushed them through against the threat of a shutdown.The debt-limit agreement imposes an automatic 1 percent cut on all spending — including on military and veterans programs, which were exempted from the caps in the compromise bill — unless all dozen bills are passed and signed into law by the end of the calendar year. Mandatory spending on programs such as Medicare and Social Security would be exempt.A wrinkle is that, because the fiscal year that drives Congress’s spending cycle ends before the calendar year does — on Sept. 30 — Congress would still need to pass a short-term bill to fund the government from October through December to avoid a shutdown.Republicans and Democrats both dread the cuts.The measure is a version of a plan offered by Representative Thomas Massie, Republican of Kentucky, a key vote to advancing the bill through the Rules Committee, who said he believed it would help avoid the Democratic-controlled Senate using the specter of a shutdown to force the House to swallow a bloated spending bill at the end of the year.“You get threatened and ransomed with a shutdown,” Mr. Massie said in an interview in late April describing the plan. “They’ll tell you, ‘If you don’t pass the Senate bill, there’s going to be a shutdown.’ I think we need to take that leverage away from anybody who would risk a shutdown to get more spending. Just take that off the table.”Some Republicans, including defense hawks, are livid about the measure, arguing that it would subject the Pentagon to irresponsible cuts. Senator Susan Collins of Maine, the top Republican on the Appropriations Committee and its defense subcommittee, called it a “harmful” provision that would leave a “threat hanging over” the Defense Department.“It would trigger an automatic, meat-ax, indiscriminate, across-the-board cut in our already inadequate defense budget and in the domestic, discretionary nondefense funding,” Ms. Collins said.Democrats, too, have a major incentive to avoid the cuts, since they have resisted reducing funding for federal programs all along.Without spending bills, major parts of the debt deal will die.Both parties stand to lose victories gained through handshake agreements during negotiations if Congress cannot pass its appropriations bills. Neither the White House nor House Republicans have published a full accounting of the agreements that do not appear in legislative text, but some have become clear.The deals allow Republicans to claim they are making deep cuts to certain spending categories while letting Democrats mitigate the pain of those cuts in the funding bills.One unwritten but agreed-upon compromise allows appropriators to repurpose $10 billion a year in 2024 and 2025 from the I.R.S. — a key priority of Republicans, who had opposed the additional enforcement funding championed by Mr. Biden and Democrats.Another side agreement, sought by Democrats, that would evaporate if the spending bills were not written designated $23 billion a year in domestic spending outside military funding as “emergency” spending, basically exempting that money from the caps in the deal.Jim Tankersley More

The UK should join a pan-European agreement on goods trade to limit the damage to its car industry from looming post-Brexit tariffs instead of seeking a delay to their introduction, according to senior officials in Brussels.From next January, electric vehicles shipped between the UK and the EU will need to have at least 45 per cent of their parts sourced from within the two regions or face 10 per cent tariffs, under “rules of origin” terms set out in their post-Brexit trading agreement. The limit rises to 60 per cent for batteries, which make up a significant part of the value of an EV, and is particularly problematic as the UK and EU still import many from China, South Korea or Japan.London wants the EU to delay the introduction of the levy until 2027. The move is backed by carmakers in the UK and EU, which have warned they will not be able to comply with “rules of origin” from next January due to the lack of battery manufacturing capacity in Europe.But two senior officials in Brussels said they would instead encourage the UK to sign up to an existing pact among more than 20 other European, Middle Eastern and North African countries that treats goods assembled in one country from parts made in another signatory state as originating in the exporting country, thereby avoiding tariffs and quotas.“The simple way to solve this is for the UK to join the Pan-Euro-Mediterranean convention,” said one, citing its “harmonised rules on trade”. After leaving the EU, the UK decided not to join PEM.The European Commission has dismissed the idea of an extension of the current EU-UK tariff exemption. “If you go down that route [of an extension] we will never be able to build our own battery supply chain in Europe because [companies] will lock in long-term supply from China,” Maroš Šefčovič, vice-president responsible for UK relations, told the Financial Times.The concession for EVs was originally agreed as part of the UK’s post-Brexit Trade and Cooperation Agreement with the EU to allow fledgling battery industries to develop on both sides of the Channel.The commission sees the impending change to the rules of origin requirements as a lever to encourage EU carmakers to invest in battery plants in the region, partly at the expense of the UK industry, which has struggled to attract investment in the sector.UK membership of PEM might help European carmakers eventually as signatory states such as Norway and Turkey develop a domestic EV battery-making sector, but trade experts warned it would do little in the short-term to solve the UK-EU tariff issue given the need to import batteries from Asia.“PEM might help in some areas, but it’s not necessarily an immediate fix,” said Sam Lowe, trade expert at consultancy Flint Global. “PEM membership doesn’t address the main problem at the moment for EU and UK carmakers, which is that they need to import batteries from Asia which is not part of PEM,” he added.

But David Henig, at the European Centre for International Political Economy think-tank, said the move would help avoid future post-Brexit tariffs in other sectors such as food. “It would go some way to removing barriers to UK manufacturers staying part of supply chains.”He added that commission officials had told him the EU and other PEM signatories would approve UK membership but he warned of a possible delay. “PEM rules are in the process of being updated, and the UK probably couldn’t accede until that process is complete.”Government insiders said ministers believed that a solution that avoided tariffs on electric vehicles from 2024 could be achieved within the framework of the TCA. The government declined to comment.

Video: The Brexit effect: how leaving the EU hit the UK More

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen on Thursday told incoming World Bank Group President Ajay Banga to “get the most out of the bank’s balance sheet” and mobilize more private capital for climate finance and global development objectives, the Treasury said.During a meeting with Banga a day before the former Mastercard (NYSE:MA) CEO takes office at the World Bank, Yellen “conveyed her strong desire for Treasury to continue close collaboration” with him on the lender’s evolution to address climate change and other global challenges.That includes continuing to implement recommendations from last year’s G20 report on capital adequacy, which argued that changes to multilateral development banks could unlock hundreds of billions of dollars in new lending.Under Banga’s predecessor, David Malpass, the bank’s shareholders in April approved an initial round of balance sheet changes to boost lending by $50 billion over 10 years while maintaining its top-tier AAA credit rating. But Yellen has insisted that further lending reforms and other changes be made on a “rolling basis” in coming months.Yellen said continuing to implement these reforms would “get the most out of the Bank’s balance sheet,” and mobilize more private capital “for our shared development objectives and to refine the operating model to increase the responsiveness and agility of the bank,” the Treasury said.She also said the World Bank needed to work more closely with its sister development banks.”Secretary Yellen stressed the need to support the poorest of the banks’ member countries as they continue to face multiple crises, including continuing global macroeconomic headwinds exacerbated by Russia’s war in Ukraine,” the Treasury added.Banga, 63, was elected to a five-year term as World Bank president by the lender’s board of governors on May 3. Nominated by U.S. President Joe Biden, the Indian-born finance and development expert was the sole contender for the job.The U.S., the World Bank’s largest shareholder, has traditionally chosen an American to run the World Bank, while Europe has chosen the head of the International Monetary Fund. Banga, a U.S. citizen since 2007, starts his new role on Friday.In a parting LinkedIn post, Malpass highlighted the growth in the bank’s climate finance for developing countries during his tenure, more than doubling it to a record $32 billion last year, as well as $440 billion mobilized by the World Bank for overlapping crises starting with COVID-19, the war in Ukraine, food and energy price shocks, supply chain disruptions, and unsustainable debt.Malpass has pushed for more debt transparency and restructuring, particularly on China’s loans to poorer countries. He said the huge buildup of government debt threatens to sap dynamism from the global economy.”Without change, the world will likely face a long period of slow growth — and developing countries will be hit the hardest,” he added. More

TOKYO (Reuters) – SoftBank Group Corp shares jumped 5% in early Friday trade as the technology investor – which is preparing an initial public offering of chip designer Arm – was caught up in a frenzy for semiconductor and artificial intelligence-related stocks.The Japanese conglomerate, which has been hit by the slumping value of its tech portfolio, has seen its shares gain 17% since last week’s close.Still, they are up only 6.4% year-to-date, compared with 172% for U.S. chipmaker Nvidia (NASDAQ:NVDA) Corp – an expected beneficiary of investment in AI – and 39% in the Philadelphia SE Semiconductor Index.On Friday, SoftBank passed the psychological level of 6,000 yen for the first time since February.”We expressed a view that SBG stock will rally ahead of the ARM IPO later in the year… But given (the) market’s fascination for semi-stocks, we think it makes sense to move early,” Jefferies analyst Atul Goyal wrote in a client note, upgrading his recommendation on the stock to “buy”. Other beneficiaries of enthusiasm for chip-related stocks included equipment makers Advantest Corp and Tokyo Electron Ltd, which have climbed 109% and 50% respectively year-to-date. SoftBank CEO Masayoshi Son, who has argued that the rise of artificial intelligence drives his investments, has also been caught up in recent enthusiasm for generative AI, which proponents compare to the arrival of the internet.”He feels that ‘finally my time has come’,” SoftBank Chief Financial Officer Yoshimitsu Goto told reporters at an earnings briefing last month. More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.Asian markets are looking for a positive end to the week on Friday following a solid rally on Wall Street the day before, as the U.S. debt ceiling vote passed its first congressional hurdle and hopes rose that the U.S. economy will achieve a ‘soft landing’.South Korean inflation for May is the main regional economic indicator on the calendar, and the won could also get a jolt from revised first quarter GDP growth figures. Otherwise, Friday’s impetus looks set to come from Thursday’s ‘Goldilocks’ trading on U.S. markets.A batch of indicators suggested U.S. inflationary pressures are cooling, which could allow the Fed to pause its rate-hiking cycle later this month, while other data showed the labor market remains strong. A win-win for risky assets. A weaker dollar and lower Treasury yields also helped fuel the surge in U.S. stocks, with the Nasdaq and tech sector once again the highest fliers. The Nasdaq is on track for a sixth straight weekly gain, which would be its best run since 2019. Contrast that with China, where purchasing managers index reports for May were mixed, broader economic data is weak, the central bank is expected to ease policy soon, and investors are pulling their money out of the country. Little wonder the yuan is sliding further below 7.00 per dollar to fresh 2023 lows on a near daily basis. The dollar’s strength against the yuan on Thursday is telling, because it was not replicated across Asia. The Indian rupee registered its biggest rise in three months after PMI data showed factory activity in India grew last month at the fastest pace in two and a half years. This follows Wednesday’s surprisingly strong GDP data.The Australian dollar had its best day in six weeks, and the Japanese yen rose for a fourth consecutive session – its longest winning streak since November.Global markets on Friday will take their cue from the U.S. employment report for May but its release comes after Asian markets close, leaving Korean CPI and revised GDP as potentially the main market-moving economic indicators. Annual inflation is expected to ease to 3.30% from 3.70% in April, which would be the lowest since October 2021.Here are three key developments that could provide more direction to markets on Friday:- South Korea CPI inflation (May) – South Korea GDP (Q1, revised)- Japan monetary base (May) (By Jamie McGeever) More

The lowest-paid employees will receive A$22.61 ($15.34) an hour from July 1, according to Reuters calculations based on the current rate of A$21.38. The decision from the Fair Work Commission would affect more than 2 million workers. “The level of wage increase we have determined is, we consider, the most that can reasonably be justified in the current economic circumstances,” said the Commission in a statement. “In our consideration, we have placed significant weight on the impact of the current rate of inflation on the ability of modern award-reliant employees, especially the low paid, to meet their basic financial needs.”Some economists have feared that a sizeable increase could set a benchmark for other wage expectations and complicate the Reserve Bank of Australia’s job of returning inflation back to 2-3% target range. So far, aggregate wage growth – which accelerated to a decade-high of 3.7% last quarter – has lagged forecasts, with Governor Philip Lowe warning of upside risks to wages from weak productivty growth, rather than nominal wages.($1 = 1.4743 Australian dollars) More