Minimum Wage Decision
Fair Work Australia has ruled that Minimum wage workers will receive a pay rise of $19.40 a week, less than the $28 claimed by unions.
Fair Work Australia today announced the minimum wage would rise to $589.30 a week, from $569.90.
In recent years the tribunal had only granted a flat dollar increase, so today’s 3.4 per cent rise will be a bigger boost for those on higher paid awards.
FWA said it recognised that many businesses were facing a tough time after a spate of natural disasters including floods in Queensland, NSW and Victoria and Cyclone Yasi in Queensland.
The minimum wage panel, headed by Fair Work President Justice Geoffrey Giudice, said that while natural disasters had hurt growth, “the economy performed comparatively well over the 12 months against a number of other developed countries”. In justifying its decision, Fair Work said the immediate economic outlook was positive despite some risks.
“Employment is growing, unemployment is reducing and labour force participation remains high. In the circumstances a significant increase is appropriate which will improve the real value of award wages and assist the living standards of the low paid.”
“On balance, we have decided not to make any provision for deferral of the increase for employers affected by natural disasters.”
Unions had been pushing for a $28 a week rise, saying Australia’s 1.4 million minimum wage earners would struggle to make ends meet unless they were handed a healthy pay rise.
The Australian Chamber of Commerce and Industry wanted any minimum wage increase limited to $9.50 a week with exemptions for flood-hit areas, while the Australian Industry Group backed a $14-a-week increase.
The ACCI and Industry had argued such a rise would be counter-productive, prompting businesses to cut working hours as well as putting pressure on inflation.
In its submission, the ACCI said last year’s record $26 a week rise for workers saw one-third of Australia’s small businesses reduce working hours.
VECCI had also supported the Australian Chamber of Commerce and Industry’s submission that a moderate weekly increase of $9.50, or 25 cents to the relevant minimum hourly rate.
VECCI Manager – Workplace Relations Policy, Alexandra Marriott, says the increase will magnify pressure on already struggling smaller employers.
“There is a direct connection between wage costs and the ability of smaller enterprises to engage new employees and this increase will make it harder for those employers to take on more staff,” says Ms Marriott.
The latest wage increase comes into effect on July 1.