Australia's record low wage growth looms as a critical political battleground with the Morrison government pinning pay rises on driving down unemployment.
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The federal budget forecasts a real wage cut for the next two financial years before inflation and pay growth reach parity in 2022/23 and 2023/24.
The next time workers can expect wage growth to outstrip the cost of living is in 2024/25.
Treasurer Josh Frydenberg said real wages remained at a 10-year average because of low inflation.
"Wages growth has been slower than we would like," he told the National Press Club on Wednesday.
"We want to drive wages up. The way to do it is through driving the unemployment rate down."
Labor argues the government should pump money into programs that drive productivity to achieve wage rises.
"Wages are going to not keep up with the cost of living over the next four years," Opposition Leader Anthony Albanese told the ABC.
"That's the damning indictment of this government in its own budget papers."
A federal election is due between August and May.
The government claims the big-spending budget will support 250,000 new jobs over the next two years.
The budget deficit is forecast to be $161 billion this year, while debt is expected to reach almost $1 trillion in 2024/25.
Mr Frydenberg said the budget's income tax breaks, business investment incentives and childcare reforms would strengthen the economy.
"The measures for the Morrison government have been targeted, designed to get more people into work," he said.
Shadow treasurer Jim Chalmers said workers lucky enough to hang on to their jobs during the pandemic now faced real wage cuts.
"What is the point of an eight-year-old government racking up $1 trillion of Liberal debt when workers' wages aren't keeping up with their bills?" he said.
The coalition's spending bonanza also pours tens of billions into critical services including aged care, disability and mental health.
Prime Minister Scott Morrison has defended the cash splash, arguing the spending is needed because of pandemic-induced global economic conditions.
"The economic impact on the global economy means that this pandemic recession is 30 times worse than what we saw in the global financial crisis," he told parliament.
The coalition savaged Labor for GFC stimulus spending in 2008 despite Australia navigating the tumultuous period better than most developed economies.
Aged care will receive an extra $17.7 billion over four years to address a damning royal commission report which detailed horror stories of neglect and abuse.
Some $2.3 billion will be spent on a mental health funding increase which experts had been demanding for years.
The National Disability Insurance Scheme is receiving a $13.2 billion boost, while money will also be shelled out on training and apprentice subsidies.
Low- and middle-income earners will have a tax break worth up to $1080 extended for a year, while businesses will also benefit from asset write-offs and other incentives.
Australian Associated Press
