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Labor, business at odds over minimum wage

Adam Zuchetti
Adam Zuchetti
14 May 2019 2 minute readShare
Bill Shorten and James Pearson

Labor has confirmed that it will move quickly in its push for a “real wage increase”, just as a major business lobby is pushing for the annual minimum wage rise to be capped at 1.8 per cent.

In a letter to Fair Work Commission president Iain Ross, Opposition Leader Bill Shorten and shadow Minister for Employment and Workplace Relations Brendan O’Connor confirmed their plans to “withdraw the current government’s submission to the Annual Wage Review” should it win this Saturday’s election.

Instead, Mr Shorten and Mr O’Connor said that a Labor government would “make a new submission requesting a real wage increase to award rates”, and do so quickly so as not to “hold up any increase” that would be likely to take effect from 1 July.

“Labor will legislate so that the Fair Work Commission will take into greater account cost of living pressures for Australians on the minimum wage as soon as practicable; however, on the first day of government, we will argue through the current Annual Wage Review for a real increase to award rates,” they wrote.

“We have made this unprecedented decision on behalf of Australia’s workers who rely on the award minimum rates and do it because this government has completely failed to advocate for workers in this country.

“At no point in the last six years has this government supported real increases in submissions to the Annual Wage Review. Instead they have provided a slew of arguments which could only be understood to be advocating against real increases.”

Mr Shorten and Mr O’Connor continued: “We recognise that the Expert Panel will soon be making and issuing its decision on the Annual Wage Review and this could be very soon after the election.

“We want to emphasise that in providing a new submission on behalf of the Australian government, it is not our intention to hold up any increase the Expert Panel may consider making for Australia’s workers on 1 July 2019.”

The comments to the submission come despite the Fair Work Commission having raised the minimum wage by 3.5 per cent in June last year — well above inflation which, at the time, sat at 2.1 per cent. That too was on the back of a larger-than-expected 3.3 per cent rise the year before, when inflation was 1.9 per cent.

According to the Reserve Bank, inflation is currently sitting at just 1.3 per cent.

In its own submission to the Fair Work Commission’s Annual Wage Review, business lobby The Australian Chamber of Commerce and Industry called for any increase to be limited to 1.8 per cent.

“There is scope for minimum wages to rise in the current economic environment, [but] we need to strike the right balance to ensure small businesses, who will be hardest hit by an increase to their wages bill, can keep their doors open, provide jobs and serve the needs of their local communities,” its CEO, James Pearson, said.

“An increase in the minimum wage will mean a pay rise for up to 2.2 million Australians earning up to $177,000 per year who have their pay set by awards, as well as the 180,000 people earning the national minimum wage.

“We must ensure our independent minimum wage setting system balances all interests, including the needs of employees, businesses, the economy and those searching for jobs or more work.”

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Labor, business at odds over minimum wage
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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