Australia’s lowest-paid workers have the Albanese government’s backing for a wage boost that will stop soaring living costs from eating into their pay packets.
Employment Minister Tony Burke outlined the case for ensuring Australia’s low-paid workers do not go backwards in a submission to the industrial umpire’s yearly update to the minimum wage.
He said cost of living pressures were having the greatest impact on low-paid workers because they relied more heavily on their incomes to pay for general expenses.
“It’s like when you’re trying to chase a bus and the bus is going faster than you can run, and as bills are coming in, people’s wages just aren’t keeping pace,” he said on Friday.
“And we want to make sure that those low-paid workers are able to catch up, effectively getting them back onto the bus.”
Few are arguing against an increase amid painfully high inflation, which came in at 6.8 per cent annual growth at the last official count.
But the opposition and business groups have called for moderation over fears rising wages could cause inflation to stay higher for longer.
Last year, Labor supported the case for a lift in the minimum wage roughly in line with inflation, which at that point had already started to track sharply upwards.
The Fair Work Commission ultimately landed on a 5.2 per cent pay increase, bolstering low-paid workers’ wages by $40 a week.
Mr Burke said the government’s submission did not include a specific figure because inflation levels were expected to move ahead of the final wage decision mid-year.
He added the phrase “low paid” was chosen carefully and it would leave the commission to decide if that definition should include awards wages at the lower end of the pay scale.
“There are some people on awards for example, pilots, who are on an award that are facing cost-of-living pressures, but quite different to what people are paying on the lowest wages.”
The submission also noted that inflation should not be the only factor the commission considers in its decision.
The Australian Chamber of Commerce and Industry says cost pressures weighing on small businesses should also be factored into the wage decision.
The business group is backing a 3.5 per cent boost plus the 0.5 per cent lift in the superannuation guarantee starting from July 1 – its highest proposal ever in a submission to the annual wage review.
Chamber CEO Andrew McKellar warned a wage blowout would take a toll on small businesses and potentially prompt employers to cut hours or headcount.
He also said matching the minimum wage to inflation would keep inflation stubbornly high.
“It puts more pressure on small business, it’s feeding back into higher costs. In the end, we’re not going anywhere,” Mr McKellar said.
Mr Burke said Australia wasn’t experiencing high wage growth and even after the commission lifted the minimum wage for workers by 5.2 per cent last year, overall wages grew at a relatively moderate 3.3 per cent in annual terms.
Peak union group the ACTU, which is pushing for a seven per cent rise to minimum and award wages, says excessive company profits – not wages – are fuelling price inflation.
© AAP 2023
