In Brief
- The Fair Work Commission has delivered an increase to minimum wages, taking the hourly rate to $24.
- The commission cited a number of factors including the war in the Middle East as contributing to its decision.
Australia's 2.8 million lowest-paid workers have been handed a 4.75 per cent increase to their minimum wage from 1 July, taking the hourly rate to $24.44 per hour or $1,004.90 per week.
While it's more than the rate of inflation — which was 4.2 per cent in April, according to the Australian Bureau of Statistics — it's lower than what unions had asked for and much higher than what employers were seeking.
The Fair Work Commission (FWC), the country's workplace relations tribunal, handed down its annual wage review decision on Tuesday, saying this year's decision was "particularly challenging" given a number of economic factors including the Middle East conflict and inflation coming in above forecasts.
FWC boss Adam Hatcher said last year's decision of a real wage increase "narrowed the real wage gap" but rising inflation has narrowed that gap.
It would now take a wage rate increase of well over 5 per cent to close the gap, he said.
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"We have concluded regrettably that it would not be practicable or responsible ... to award a real wage increase for employees ... that would be sufficient to close the real wage gap entirely," Hatcher said.
Unions had been calling for a 6 per cent increase, which would have been the biggest increase to award wages on record, and would have taken the minimum wage to $26.45 per hour.
The Australian Council of Trade Unions had argued that rate would allow workers to meet living expenses, catch up on lost wage growth and prepare if global economic conditions worsen.
"The lowest paid workers in Australia should not go backwards because of Donald Trump's war. They have the least capacity to cope with price increases, so their wages must keep up," ACTU secretary Sally McManus said.
Employers, however, called the 6 per cent target "ludicrous" and instead proposed a 3.9 per cent increase, in recognition of the "deeply uncertain circumstances confronting" the economy, the Australian Industry Group (AIG) said.
"Given we are facing into recessionary conditions, to grant more would cause significant damage to both business and workers," AIG chief Innes Willox said.
"Businesses simply do not have an endless capacity to absorb costs — including wage increases — without passing them on to consumers or fundamentally changing how they work, including the composition of their workforce."
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