With the federal election just days away, wage increases in response to inflation have become a point of contention.
19 May 2022
Opposition Leader Anthony Albanese has promised to push for a 5.1% rise to the minimum wage if elected, which equates to an increase of $1 an hour.
In response, Prime Minister Scott Morrison rubbished the idea, stating that it would add to inflation pressures.
“Any potential support you might have got, and wages, will be clawed back in even higher interest rates and even higher inflation,” he said.
The debate comes as business groups from across Australia make submissions to the Fair Work Commission’s Annual Wage Review. The Review forms part of the National Minimum Wage Order, which comes into effect on 1 July.
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In its submission to the review, the ACCI backed a 3% wage increase.
“Imposing unaffordable wage increases on small business will cruel jobs, not create them. An increase of 5% or more would inflict further damage on small business, and the millions of jobs they sustain and create,” ACCI chief executive Andrew McKellar said.
“With already thin margins, businesses are being forced to pass on price increases to consumers. As the Reserve Bank has warned, an excessive wage increase will trigger further inflation, increasing costs for consumers and businesses alike.
“While cost of living issues have taken centre stage in the federal election campaign, what we’re not hearing enough of, is the rising costs businesses are facing. According to recently released data from the ABS, three in five businesses have had their costs surge in the last three months.”
Mr McKellar said an excessive minimum wage increase threatens the strength and sustainability of our post-pandemic recovery.
“We cannot afford the risk to small business viability, and the consequent reversal in full and part-time jobs,” he said.
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