Australia’s lowest-paid workers to receive 5.75% increase in minimum wage | Industrial relations

Almost 2.75m Australians will receive a pay rise of 5.75% from 1 July after the Fair Work Commission released its decision for those on minimum and award wages.

The decision, released on Friday, indicates the minimum wages will lift to about $22.60 per hour or $859.32 per week, based on the Fair Work Commission’s decision.

Workers’ salaries have been falling in real terms in recent years as salary increases have failed to keep up with inflation. For the March quarter of this year, wages gained 3.7%, well shy of the 7% annual rise in consumer prices.

The increase is about midway between the 3.8% some business groups such as AiGroup called for, and the 7% sought by the ACTU.

“We are confident that the increase we have determined will make a modest contribution to total wages growth in 2023-24,” Adam Hatcher, the Fair Work Commission president, said.

Last year’s 5.2% increase had affected about one in four workers whose wages made up 11% of the national total. That increase, though, made up less than 10% of the total wages growth and had not contributed to a wage-price spiral, Hatcher said.

The Reserve Bank will take into account today’s increase when its board meets to decide on interest rates next Tuesday. Before today’s announcement, investors were betting there was only about a one-in-five chance of another 25 basis-point rate hike to 4.1% although they now see one more increase as all but certain come August.

Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry, said the wage increase would add $12.6bn to the annual wages bill. It would hurt small businesses, in particular, and add to increasing costs such as energy.

More to come …