Australia

Labor makes case for 'substantial increase' to minimum wage

0:00

Opposition Leader Bill Shorten has given his strongest signal yet that Labor would seek to change the laws around setting the minimum wage.

Federal Labor wants a "responsible real increase" in the minimum wage to address poverty and cost of living pressures but has declined to say how much this should be.

Opposition Leader Bill Shorten and Labor workplace spokesman Brendan O'Connor have lodged a submission on the minimum wage to the Fair Work Commission's annual review.

Mr Shorten has supported the concept of a "living wage", but the submission fails to put a figure on how much wages should rise for 2.2 million low paid workers. 

Mr O'Connor told ABC radio on Friday there needs to be a "fair, responsible and reasonable increase" for workers.

"We will certainly be outlining our position around the living wage before the election," Mr O'Connor said. 

The submission argues no Australian working full-time should be living in poverty, and that productivity has expanded four times faster than wages since 2013 while company profits have grown five times faster than wages since 2016.

Labor MP Brendan O'Connor says an increase to the minimum wage won't result in job losses.
Labor MP Brendan O'Connor says an increase to the minimum wage won't result in job losses.
AAP

The Australian Council of Trade Unions have called for a $43-a-week increase this year, as part of a two-year proposal to ensure workers are lifted out of poverty.

That's alarmed employer groups which have argued for a wage freeze or a modest increase to avoid job losses. 

In its submission, Labor says international experience shows significant increases in the minimum wage can be sustained without costing jobs while on the other hand, persistently low wages growth posed a real threat to consumer demand and the broader economy.

Legislative changes

Notably, Labor's submission says the commission panel reviewing the minimum wage is "constrained by the current legislative provisions".

"(The ALP) no longer has confidence that these provisions have the capacity to deliver the wages growth that the lowest paid workers, and our economy, require," the submission says.

AAP Image/Lukas Coch
Restaurant and cafe owners don't want to give employees a pay rise.
AAP Image/Lukas Coch

This sends the strongest signal yet that the law could change if Labor wins the federal election due in May.

Pre-empting an attack by the coalition, Labor pointed to the UK as proof a higher minimum wage won't push more people into unemployment.

"Despite ... significant increases in the living wage - 26.3 per cent over four years - the UK unemployment rate is at its lowest for over 40 years, there are over 3.3 million more people in work since 2010 (with) .... forecasts of 800,000 more jobs by 2022."

The submission also hints a Shorten Labor government would seek to improve the system of periodically assessing the minimum wage to address the "wage bite", or the proportion of full-time wages it represents.

In the past five years the national minimum wage averaged 54.3 per cent of the median wage, compared to an average of 54.1 per cent over the past 10 years.

Prime Minister Scott Morrison said on Thursday said the best way to increase wages was to have a strong economy and lower taxes.

Stay up to date with SBS NEWS

  • App
  • Subscribe
  • Follow
  • Listen
  • Watch