How does this make you feel?
Key Points
- The Fair Work Commission will review the minimum wage, taking submissions from government, business, and unions.
- Treasurer Jim Chalmers has emphasized the need for the increase to keep pace with inflation but has not disclosed a specific percentage.
- Proposed increases range from 2 to 5 per cent, as unions and businesses present their arguments.
Unions and business groups are at odds over how much Australia’s minimum wage should increase to ease cost of living pressures.
The federal government has indicated that the annual wage increase should align with the economy, with inflation currently at 4.1 per cent, without specifying a precise percentage.
Treasurer Jim Chalmers stressed the necessity of a boost to keep up with cost of living pressures and ensure that “low-paid workers in this country don’t regress.”
The Fair Work Commission’s annual wage review decision impacts the national minimum wage and Award pay rates, which around a quarter of all Australian workers receive.
The Australian Council of Trade Unions (ACTU) is advocating for a 5 per cent increase, which would raise the minimum hourly rate to $24.39 or $48,200 per year for full-time workers.
ACTU secretary Sally McManus argued that the lowest-paid workers are most affected by inflation, and businesses could accommodate the 5 per cent wage hike.
ACTU secretary Sally McManus said the current minimum wage was not keeping up with the cost of living. Source: AAP / Diego Fedele
Meanwhile, the Australian Chamber of Commerce and Industry (ACCI) is proposing an increase of no more than 2 per cent, which would raise the minimum wage hourly rate to $23.69 or $46,823 per year for full-time workers.
ACCI chief executive Andrew McKellar noted that inflation has been decreasing since its peak in 2022, while business conditions have become more challenging.
“We’re seeing investment stagnating, a sense of pessimism among many businesses, and a decline in labor demand,” McKellar told ABC Radio.
“It’s becoming increasingly difficult for businesses to hire people, and for those on minimum wage, having a job is more valuable than watching others get a pay raise.”
What was the minimum wage increase in 2023?
Last year, the Fair Work Commission delivered its largest wage increase in four decades, citing low unemployment, declining wages, and high inflation.
The annual decision considers economic conditions when determining wages, including cost of living pressures and their impact on households.
The federal government emphasized that the planned increase should complement, not replace, a much-needed wage boost for Australia’s lowest-paid workers.
Any raise in the national minimum wage will take effect in the first full pay period on or after July 1.
– With additional reporting from the Australian Associated Press.
