The decision set to impact millions of workers’ wages
Almost three million workers will find out how much their pay packets will increase when the industry arbitrator announces the much-anticipated annual pay review.
The Fair Work Commission’s decision, to be announced on Tuesday, determines the increase in minimum wage and premium wage tariffs as of July 1.
As the blockade of the Strait of Hormuz worsens already high inflation pressures, unions are pressing the commission for high wage increases to ensure workers do not go backwards.
Peak body the Australian Council of Trade Unions called for a six per cent increase; This will be the largest wage increase in history.
ACTU secretary Sally McManus said: “The Fair Work Commission must not allow low-paid workers in the hospital, retail and care industries to go backwards.”
“Rent, mortgage and bills are locked in, meaning if these workers’ wages fall below inflation, they will have no choice but to cut back on basic needs like food and doctor visits.”
But employer groups argue that a six per cent increase would further squeeze operating margins, leading to higher insolvencies and inflation becoming steeper as firms would be forced to pass on costs to consumers.
Headline inflation was 4.2 per cent in April, according to the Australian Bureau of Statistics
The Australian Chamber of Commerce and Industry suggested a 3.5 per cent increase, arguing that headline inflation, which was 3.4 per cent in April, was a better indicator.
“The board should therefore avoid turning a volatile price shock into a permanent wage shock through a large increase,” ACCI chief economist Peter Grist said in a submission to the commission. he said.
But this would still lead to real wage cuts as workers fall behind the rising cost of living.
Without specifying an exact figure, the government called for “sustainable real wage growth”.
“Decent pay and conditions are a really important way we can help people with their living costs,” Finance Minister Jim Chalmers told reporters in Brisbane on Monday. he said.
In recent years the commission has tended to split the difference between union and employer demands, with award salaries rising slightly above the headline inflation rate.
Oxford Economics Australia expected wages to rise between 4.5 and 5 percent.
“This is broadly consistent with what the Fair Work Commission has delivered over the last few years, providing pay rises that are slightly above inflation,” Ben Udy, the consultancy’s chief economist, told Sky News on Monday.
The decision covers about one in five workers, but accounts for just 11.2 per cent of the national wage bill, given that they tend to be paid lower, the commission estimates.
But economists say the decision affects demands for wage increases across occupations in the economy, leading to broader flow-on effects.
