The much-debated wage rise during election campaign has become a reality. The Fair Work Commission has handed down an increase to the minimum wage of 5.2 per cent, equating to a $40 weekly pay rise for millions of workers.
Australia’s minimum wage has risen from $20.33 an hour (or $772.60 / week), to $21.38 an hour, (or $812.60 / week).
The increment of $1.05 per hour or $40 a week adds up to $2000 per annum.
Fair Work Commission President Ian Ross used the sharp increase in cost of living, along with rising inflation, to base his decision to increase the minimum wage.
“We accept that the approach we have adopted will result, albeit minor, compression in relativities,” he said.
“But that consideration is to be balanced against the need to provide greater relief to low-paid workers in the context of rising cost of living pressures.”
He said the strength of the labour market would not have a “significant adverse effect” on the national economy.
“We acknowledge that the increases we have determined will mean a real wage cut for some award-reliant employees,” he said.
“This is an issue that can be addressed in subsequent reviews.”
The Australian Council of Trade Unions (ACTU) had proposed a 5.5 per cent increase.
The Australian Chamber of Commerce and Industry, Australian Industry Group and a number of other employer bodies proposed an increase to minimum wages of between 2.5 and 3 per cent.
The Australian Government, as Prime Minister Anthony Albanese had promised during the election campaign, submitted that the Commission should ensure that the real wages of low-paid workers do not go backwards.
Australian Council of Trade Unions secretary Sally McManus says she is “very happy” with the outcome.
“We think it is going to make a significant difference to the pressures that low paid workers are under with cost of living rising,” she said.
The aviation, tourism and hospitality sectors awards will change from October 1 due to “exceptional circumstances. All other awards will increase from July 1.
Australian Chamber of Commerce and Industry CEO Andrew McKellar says the increase poses a “very significant risk” to the economy.
“By our calculations, this will add $7.9 billion in costs to the affected businesses over the year ahead, so that will be a very considerable burden that those businesses will either have to take to their bottom line, or pass onto their customers,” he said.
“It comes at a time when inflation is emerging as one of the most urgent challenges facing the Australian economy and if we are to address that, if we are to remain competitive, then, clearly, this is not a decision that will help in those circumstances.”
Currently inflation is sitting at a 20-year high of 5.1 per cent, with Reserve Bank of Australia Governor Philip Lowe predicting inflation will reach 7 per cent by the end of the year.
On the other hand, our politicians also got a pay rise and a much bigger one compared to the minimum wage earner.
The 5.2% or $40 a week pay rise only adds up to $2000 a year approximately while the Remuneration Tribunal has awarded 2.75% increase to the politicians.
This 2.75% increase in politicians’ wage adds up to $5969.15 (approx.) per annum or $119.83 per week for a backbencher, ordinary member of parliament. Their new salary will be $217,060.00 per annum.
The corresponding increase for the federal leader of the Opposition, Peter Dutton works out to be $11,027.50 (approx.) per year or $220.55 per week. Peter Dutton will now get $401,000.00 per annum after this increase.
And our Prime Minister Anthony Albanese will get an extra $15,510.00 (approx.) per year or $310.00 per week. The Prime Minister salary goes up to $564,000.00 per annum.
It is to be noted, that unlike the minimum wage which is regulated by the Fair Work Commission upon submissions made by the stakeholders, the pay rise for politicians is determined by the Remuneration Tribunal and the politicians do not have a say in that decision making.
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