Fair Work Commission announces 5.75% increase for minimum wage workers

By CHRISTINE LAI

The Fair Work Commission has announced a 5.75 percent pay rise for both the national minimum wage and the award minimum wage following the workplace tribunal’s annual minimum wage review.

Minimum wage workers will see their wages lifted from $21.38 an hour to $22.61, or $859.32 per week.

In this year’s annual wage review, the Fair Work Commission noted that currently only about 0.7 percent of Australian employees are paid the National Minimum Wage and approximately 20.5 percent of Australian employees are paid in accordance with minimum wage rates in modern awards.

With the announcement, around 2.7 million workers, which make up a quarter of Australia’s workforce, will be affected by the changes.

There are 121 modern awards which apply to employees in the national industrial relations system in various industries and occupations and a small number of modern enterprise awards which apply to specific business enterprises.

Despite this year’s national minimum wage increase being higher than last year’s 5.2 percent, Fair Work Commission president Justice Adam Hatcher, admitted that this would not maintain the true value of minimum wage due to continued inflation.

Hatcher stated that the increase was “the most that could be reasonably justified.”

“In the medium to long-term, it is desirable that modern award minimum wages maintain their real value and increase in line with the trend rate of national productivity growth,” he said.

The Fair Work Commission’s announcement of their annual wage review also stated that the total wages of “modern award-reliant workers” constituted a limited proportion of the national wage bill, and that the tribunal was “confident” that the increase in the national minimum and award wages would not result in a wage-spiral.

“We are confident that the increase we have determined will make only a modest contribution to total wages growth in 2023-24 and will consequently not cause or contribute to any wage-price spiral,” the tribunal reported.

According to the Australian Bureau of Statistics, the monthly CPI indicator rose 6.8 percent in the twelve months to April, up from the reported 6.3 percent increase in March this year.

Wage increases ‘bad for business’

Business NSW CEO Daniel Hunter responded to the decision of the workplace tribunal, estimating that the ruling would equate to around a $4.6 billion increase in annual costs to NSW businesses.

“This large wage increase comes at a time when a growing proportion of businesses (about one in four employers) have indicated to us that they will shed staff in the next three months,” Mr Hunter said.

“Business confidence also remains low, according to the Business Conditions Survey. This, combined with falling productivity levels, make now a bad time to be increasing wages by such a significant amount.”

Hunter stated that the planned wage increases would be “inflationary” as business profit margins were already “completely squeezed.”

Australian unions called for pay rise of 7% to tackle cost-of-living pressures

Earlier this year, The Australian Council of Trade (ACTU) made a submission to the Fair Work Commission’s annual minimum wage review, calling for a pay rise of 7% for the lowest-paid workers.

ACTU secretary, Sally McManus, affirmed that the 7 percent pay increase was “essential” as it would “help working people keep their heads above water.”

“It is simply about survival for the lowest-paid workers in our country. There are real people behind the statistics of Australia’s cost-of-living crisis – the workers we rely on to deliver vital services in early learning, aged care, disability care, fast food, cleaners, security, and retail,” she said in a statement to The Guardian.

Retail and Fast Food Workers Union (RAFFWU) secretary told ABC News that while the news of the 5.75 percent minimum wage rise was welcome, it was not enough to combat the cost-of-living pressures that workers were experiencing.

As reported by The Guardian, the RAFFWU spokesperson stated:

“Inflation is at 6.8% and so 5.75%, while it is welcome because workers right across Australia are doing it tough, it is still a whole [percentage point] below the current inflation rate which works out to 25 cents an hour or $10 a week,” explaining that the increase was still a “real wage cut.”

Peak social services body, NCOSS, welcomed the Fair Work Commission’s 5.75 percent wage increase and called for assurance that the NSW Government would fund the wage increase as well as the 0.5 percent increase in the superannuation guarantee levy from July 2023.

NCOSS Acting CEO Mr McAlpine stated that rolling crises have driven an exodus of staff to industries which offer better pay and conditions, where the work is much less demanding, while frontline services were struggling to meet escalating demand.

“Without additional funding to cover wage increases – and, with inflation sitting at well above 6 percent, the other rising costs of doing business – these services will be struggling to keep the doors open,” he said.

“We need the NSW Government to provide the additional necessary funding for providers of services to people who are homeless, households who cannot afford to put food on the table, women and children fleeing violent situations, and people struggling with serious health issues,” he added.

The award rates of pay will be increased by 5.75 percent effective from 1 July 2023.