Anthony Albanese is backing a ‘fair’ pay increase for ‘s lowest-paid workers – putting his Labor government on a collision course with employers.
The federal government has made a submission to the Fair Work Commission recommending a real wage increase for the three million ns, either on the minimum wage or an award, from July 1.
Treasurer Jim Chalmers and new Employment and Workplace Relations Minister Amanda Rishworth said this was about helping ‘s lowest-paid workers.
‘This will help around three million workers across the country, including cleaners, retail workers and early childhood educators,’ they said.
‘Boosting wages, cutting taxes for every taxpayer and creating more jobs are central parts of our efforts to help ns with the cost of living.’
The annual wage review decision, due to be announced in June, would affect 180,000 ns on the minimum wage plus the 2.7million low-paid workers on 121 awards.
The government’s submission didn’t specify a wage increase figure but said it should be a ‘fair’ level above inflation that would help the low-paid cope with cost-of-living pressures.
This would imply a real wage increase that’s well above inflation, putting the government at odds with employers who only want an increase that just keeps pace with inflation.
‘The n government recommends that the commission award an economically sustainable real wage increase to ‘s award workers,’ the submission said.
‘A real wage increase would provide further relief to lower income workers who continue to face cost-of-living pressures.
‘The government submits that this outcome is both fair and economically responsible.’
‘s lowest paid last year received a 3.75 per cent increase that saw the minimum wage rise to $24.10 an hour or $915.90 a week.
The industrial umpire’s decision was made in June last year when headline inflation was at 3.6 per cent, which meant only a small real wage increase of 0.15 per cent.
But in the year to March, wages rose by 3.4 per cent when the consumer price index was at 2.4 per cent.
This meant a real wage increase for most workers of one per cent as sharp falls in petrol and electricity prices boosted the buying power of those with a job.
Unemployment in April remained at a low 4.1 per cent – or at a level below the non-accelerating inflationary rate of unemployment where wage rises can still fuel inflation because workers have more power to bargain for better pay.
This could discourage the Fair Work Commission from awarding another generous pay increase, considering overall wages are now outpacing inflation again.
‘s peak employer group is arguing for a small, 2.5 per cent increase in the minimum wage so pay barely keeps pace with inflation.
But the government argues it can afford to be generous, with both underlying and headline inflation now both within the Reserve Bank’s two to three per cent target.
‘An increase in minimum and award wages is consistent with inflation sustainably remaining within the RBA’s target band, and will provide further relief to lower income workers who are still doing it tough,’ Chalmers and Rishworth said.
‘This position is both economically responsible and fair.
‘It will ensure low paid workers can get ahead as inflation moderates and real wages continue to grow across the economy.’
Since Labor in May 2022, ‘s national minimum wage has increased an historically high levels so pay levels could keep pace with spiralling inflation.
This included a 5.2 per cent rise in 2022, which was the highest in 16 years as inflation climbed to levels last seen in 1990.
A year later in 2023, there was a 5.75 per cent increase.
‘The minimum wage has already increased by $143 a week since we came to office, and the median wage has increased by $206 per week since we came to office,’ Chalmers and Rishworth said.
‘Now, we’re recommending they should go further, providing an economically sustainable real wage increase to ‘s award workers.’
Albanese this week told his cabinet that increasing the minimum wage would be one of his first election priorities despite the added financial pressure that would put on already struggling businesses.
‘Labor will always stand for improving people’s wages and conditions,’ he said.
The expiry of the government’s $75 quarterly electricity rebates at the end of 2025 could see a return of inflationary pressures.
The n Chamber of Commerce and Industry argued weak economic growth only justified a small increase of 2.5 per cent, with compulsory employer superannuation contributions rising from 11.5 per cent to 12 per cent on July 1.
But the government argued economic growth was likely to rebound, even as Donald Trump’s tariffs hit the global economy.
‘Trade hostilities and extreme global uncertainty create significant downside risks to the global growth outlook. While will not be immune to these global developments domestic growth is expected to gradually pick up in 2025 and 2026,’ its submission said.
The deadline for annual wage review submissions is Friday at 4pm AEST.