I think our wages are high because of the increasing value of the dollar. For example, 1GPB was 3 dollars and now it is 1.5 - so in effect it has made our wages seem twice as high as UK wages. I certainly earn a lot more here than for a comparible job in the UK. Likewise, the price of all our food/veg etc has gone up comparitively on the strength of the dollar. Some goods imported from China have gone down to refelct this, but I would say judging by what I see in the shops, many Chinese imported items are still being sold at a 'Australian' price. Thus on a global scale we have ended up with high wages and high cost of living.
I also think that the minimum wage in Australia has broadly kept in line with cost of living. (I don't think it's generous mind you), thus for the most part, it patys to go to work. In the UK, the minimum wage is about 18k per year, yet benefits would reap you 26k. Hence many people choose to be unemployed as it quite literally doesn't pay to work. Minimum wage is digustingly low.
Another factor may be that a lot of people's wealth has been created relatively quickly due to booming house prices and equity. I know many people mid 40's who bought their houses for 100k which are now worth 1 million. They paid off their mortgages yonks ago, and so have a lot of disposable income to put into the economy. Once house prices stay this high and more people have to take on stupid mortgages then this disposable amount will dry up....
So, if we want to compete on a global scale what should we do?
