The Fair Work Commission has lifted the minimum wage by 5.2% which will see workers' hourly pay rise to $21.38 an hour from 1 July, equivalent to a pay raise of $40 a week and taking the weekly minimum wage to $812.60.
The Australian Chamber of Commerce and Industry (ACCI) chief executive Andrew McKellar said the Fair Work Commission’s minimum wage decision would cost businesses an additional $7.9 billion in the year ahead.
“The wage increase awarded by the Fair Work Commission is too much amid current economic pressures and uncertainty,” Mr McKellar said.
“While some businesses have rebounded strongly in recent months, the reality is we are experiencing a multi-speed economy.
“Many award-reliant businesses were severely disrupted by the COVID-19 pandemic and are only just beginning to recover. Imposing unaffordable wage increases on these small businesses will put jobs at risk, not create them.
“An arbitrary increase in wages risks triggering greater inflation, raising costs for consumers, and making it harder for businesses to retain workers.”
Mr McKellar said a 5.2% rise in the minimum wage would place a considerable burden for businesses on the supply side.
“They are facing great difficulty accessing the labour that they need, there is intense disruption in the supply chain and we are seeing very significant spikes in energy prices at the moment," he said.
“All of these things are adding to pressures on the supply side. They are pushing up input costs and that is feeding through into inflation. The reality is many small businesses do not have the resources to absorb extra costs.
“This annual wage decision imposes an unnecessarily complex outcome on businesses who are already facing a difficult and disparate set of economic circumstances. It’s not what we need in a modern, flexible, and internationally competitive economy where increased focus on higher productivity is needed.”
The ACCI said it had hoped for a more flexible system for wage rises across different industries.