TRANSCRIPT
For millions of Australians, their wage isn't changed by their boss, it's decided by the Fair Work Commission.
The annual wage review changes award wages, which govern the minimum payable wage for each job and industry.
From July 1st, award wages and minimum wage will increase by 3.75 per cent.
Workplace Relations Minister Tony Burke says it's a win for workers.
"What this means is 2.6 million Australians who are reliant on the award system, get to see their pay go up, it means the minimum wage continues on the trajectory that's happened since we came to office."
Fair Work Commissioner Justice Adam Hatcher says the cost of living crisis was one of the commission's key considerations.
"In determining this level of increase, a primary consideration has been the cost of living pressures that modern award reliant employees, particularly those who are low paid and live in low income households, continue to experience. This is not withstanding that inflation is considerably lower than it was at the time of last year's review."
One in five Australian workers are on an award wage.
Commissioner Hatcher says the 3.75 per cent increase aligns with other wages, and he doesn't expect it will fuel inflation.
"The increase of 3.75%, which we have determined, is broadly in line with forecasts wages growth across the economy in 2024. And will only make a modest contribution to the total amount of wages growth this year. We consider therefore, that this increase is consistent with the forecast return of inflation rate to below 3% in 2025."
As part of the wage review process, the Fair Work Commission took submissions from a range of governments and other stakeholders.
The Federal Government pushed for an increase in line with inflation, whilst the Australian Council of Trade Unions sought a 5 per cent increase.
The Australian Chamber of Commerce and Industry wanted a modest 2 per cent rise - ACCI CEO Andrew McKellar says the higher increase will test businesses.
"This tests the limits of what's acceptable from a business point of view. It will do little to take further inflationary pressure out of the economy, and that was our objective. We think that the most effective way to take pressure off the cost of living, is get inflation down and get it back into that 2-3% target range that the Reserve Bank is pursuing, that will enable interest rates to come down quicker, that's the most effective way to take pressure off the cost of living in the cost of doing business from here."
Fair Work Commissioner Hatcher says stage three tax cuts were considered by the commission.
"We have also taken into account that modern award reliant employees will shortly receive the benefit of the stage three tax cuts and the budget cost of living measures, which are projected to increase real household disposable incomes over the next twelve months."
Minister Burke says he expected the commission would consider the tax cuts.
"The Fair Work Commission will always look at all the impacts across the economy, you can't expect them to do anything else. But some of the business groups, and some of the commentators, said those tax cuts should be in place of a wage increase, some argued that those tax cuts should be an excuse for wages to fall. And the commission didn't accept that argument. What the commission has decided, is you get a wage increase, and you get the tax cuts, and you get the cost of living relief. That's exactly what the government hoped for."
This year's decision is less substantial than last year - with a 5.75 per cent increase for award rates and 8.6 per cent for the national minimum wage in 2023.
ACTU Secretary Sally McManus says she's satisfied with the result.
"The ACTU, the union movement, would have liked to have seen a bigger increase. Having said that, any day that working people get a pay increase, any day working people go forward in terms of a real pay increase, is a good day."
