Federal government backs wage increase for lowest-paid workers in line with inflation.
ABC News
Posted Fri 31 Mar 2023
The Fair Work Commission will consider submissions from the federal government, unions and business groups to determine the new minimum
The federal government is advocating for a pay increase for Australia's lowest-paid workers at least in line with inflation, a move business groups warn may "tip Australia into recession".
Key points:
The federal government is advocating for a rise that ensures the nation's lowest-paid workers are not going backwards
Business groups want to see a more modest increase, to help contain inflation and ward off the threat of a recession
Economists say an reasonable minimum wage rise would be similar to the 5.2 per cent approved in 2022
The Fair Work Commission (FWC) has commenced its annual wage review, ahead of determining the new minimum and award wage rates, which will come into effect from July 1 and directly impact the pay packets of 2.67 million workers, including 184,000 people who receive the minimum wage.
The government will today lodge its submission, recommending the FWC "ensures the real wages of Australia's low-paid workers do not go backwards".
It is a similar approach to that taken by the government in last year's review, after Anthony Albanese committed during the election campaign to "absolutely" backing a minimum wage increase in line with inflation.
Unions have also argued for a wage increase that keeps pace with inflation, advocating specifically for a 7 per cent increase.
Australia's annual inflation rate eased to 6.8 per cent in February — the second month in a row that inflation fell, after hitting the peak of 8.4 per cent last December.
The government has not put a figure on the increase it is advocating, but Employment Minister Tony Burke said low-paid workers should not be earning less in real terms.
"Every Australian deserves a fair day's pay for a fair day's work," he said.
"For too long, the former government asked Australians to work longer for less — we take a different approach.
"We believe the best way to ensure workers can deal with cost-of-living pressures is to ensure they earn enough to provide for their loved ones and to get ahead."
What is the current minimum wage?
The Fair Work Commission increased the minimum wage by 5.2 per cent from July 1 last year.
Currently, the minimum wage is:
$21.38 per hour
$812.60 per week
But he made clear the government was not arguing for widespread pay increases along the same lines.
"Our submission does not suggest that across-the-board wages should automatically increase in line with inflation, or that inflation is the only factor the Fair Work Commission should consider," he added.
Under the ACTU's proposal, the minimum hourly rate would increase by $1.50 to $22.88, while the weekly rate would increase to $869.50.
McManus looking straight ahead, wearing a black jacket
Sally McManus says the proposed 7 per cent minimum wage increase is a fair deal for workers.
"[The increase] is simply about survival for the lowest-paid workers in our country," ACTU secretary Sally McManus said on Thursday.
"Companies have been posting huge profits, driving inflation through excessive price rises, it's time they conceded they can afford to pay their workers more."
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