Millions of workers will get a 5.75 per cent wage boost under the industrial umpire’s minimum wage decision.
Both minimum wages and awards will be lifted by 5.75 per cent under the Fair Work Commission’s decision.
The new pay rates will kick in on July 1.
“The current combination of economic circumstances – mainly low unemployment, falling wages and high inflation – is very unusual and presents particular challenge in this year’s review,” FWC president Adam Hatcher said.
“A further challenge is an expected sharp slowdown in economic growth over the next year.”
But he said the commission considered the current rate of inflation on the ability of modern award like employees, especially the low-paid, to meet their basic financial needs.
“Because of the negligible proportion of the workforce to which the national minimum wage applies, this outcome will not have discernible macroeconomic effects.”
The decisions in the annual wage review affected wages of about a quarter of Australian employees.
The Albanese government favoured a pay boost that would stop Australia’s lowest paid workers going backwards, meaning wages would preferably grow in line with inflation.
Cost of living pressures have been weighing heavily on Australia’s lowest paid workers but inflation has likely past its peak, coming in at 6.8 per cent in the year to April.
Unions were also advocating for a pay boost in line with inflation, with the Australian Council of Trade Unions calling for a seven per cent minimum wage lift.
But in the lead up to the decision, the Australian Chamber of Commerce and Industry warned that too high a pay rise could cut into businesses’ viability.
The business group was calling for a 3.5 per cent increase.
Last year, the panel split its decision by awarding a 5.2 per cent increase to 180,000 workers on the lowest minimum wage, in line with inflation at the time.
As well, the umpire outlined an increase of $40 a week or at least 4.6 per cent for 2.6 million people on higher award rates.
By Poppy Johnston in Canberra
