Minimum wage set to rise by $21.60 a week

The industrial umpire has awarded up to 2.2 million Australian workers, including the lowest paid, an extra $21.60 a week from next month, taking the minimum wage from $719.20 to $740.80.

The Fair Work Commission on Thursday lifted the national minimum wage by 3 per cent to $19.49 per hour from 1 July in response to low inflation and a fall in gross domestic product (GDP) growth.

The increase fell well short of the 6 per cent, $43 per week, rise the Australian Council of Trade Unions had sought, but was higher than the below-inflation rise of 2 per cent that business wanted.

Fair Commission President Iain Ross said the umpire had decided to award a lower increase this year than last year "having regard to the changes in the economic environment, in particular the recent fall in GDP growth and inflation." He added that recent tax transfer changes, which he said had benefited low-income households, had also been a factor in the decision.


“We are satisfied that the level of increases we have decided upon will not lead to any adverse inflationary outcome and nor will it have any measurable negative impact on employment," Mr Ross said. "However, such increases will mean an improvement in the real wages of those employees who are reliant on minimum wages and an improvement in their living standards."

Mr Ross said the decision would directly impact on about 2.2 million workers, and indirectly on even more under modern award minimum wages.

Despite the recent fall in GDP growth, the Australian economy had performed relatively well, he said.

“Our overall assessment is that the relative living standards of national minimum wage and award-reliant employees have improved in recent years," he said. "Although, some low-paid award-reliant households have disposable incomes which are less than the 60 per cent of median income relative poverty line.

“Some low-paid households are plainly experiencing significant disadvantage."


The Australian Industry Group had lobbied for a 2 per cent wage increase, an extra $14.40 per week in the national minimum wage.

Ai Group Chief Executive, Innes Willox, had argued that the economy was slowing this year and businesses were struggling to cope with high costs, including rising energy prices. He said productivity growth was weak in industries with mainly low-wage employees.

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ACTU secretary Sally McManus had called on the government to raise the minimum wage to a ‘living wage’ to ensure no one in Australia works for wages that leave them living in poverty.

Reserve Bank governor Philip Lowe has repeatedly raised concerns about slow wages growth in Australia, and recently flagged an interest rate cut.

The RBA board will meet on Tuesday with markets and economists predicting the central bank will slice the cash rate to a record-low of 1.25 per cent.

March quarter national accounts will be released the following day and are expected to show a further slow down in economic growth.

Kim Nolan, 26, who works in a contract call centre in Melbourne, is on a base rate of about $22 per hour. He works as a casual to boost that rate to about $27.

"I would like to go full time to also have sick leave and holidays but I need to get the casual loadings to get by in the short term," he said.

"It is difficult because I have to go to work when I'm sick.