The Fair Work Commission is set to hand down its decision on minimum wages after federal politicians were awarded a 2.75% pay rise.
The commission will announce its decision in the annual minimum wage review at 10am on Wednesday, after weighing calls for an increase that keeps up with surging inflation.
A submission by the Albanese government called for low-paid workers’ pay not to go backwards, while unions have called for a 5.5% increase to keep up with soaring costs of living.
A rise of that size would lift the national minimum from $20.33 to $21.45 an hour, or $815.09 a week, and the annual rate from $40,175 to $42,385.
On Tuesday, the remuneration tribunal ordered that public office holders and MPs will receive a pay increase of 2.75% from 1 July, lifting the salary of a backbencher to $217,060.
The move follows a freeze on MPs’ pay during the pandemic and still represents a real pay cut, given inflation is projected to reach 6% by the end of the year.
The tribunal said it wanted to ensure that MPs’ pay should “increase relative to that of other public office holders”, so it ordered an identical increase for politicians and other statutory office holders.
The Fair Work Commission decision on Wednesday comes after a federal election campaign dominated by debate over cost of living and wage rises.
In their final submissions, employer groups sought to limit the impact of the Albanese government’s call for low-paid workers not to “go backwards” by arguing the proposed 5.1% increase should only go to those on “lower levels” of awards.
AiGroup called for a “modest” 2.5% minimum wage increase, noting the super guarantee would increase by 0.5% in July and minimum wage workers would receive the equivalent of a 1.3% boost to their pre-tax income through the government’s low and middle income tax offset.
“A wage increase of 5.1%, or anything like this level, would add substantially to the risks of raising inflation expectations, entrenching inflation and greater increases in interest rates,” it warned.
Last week, the Australian Council of Trade Unions secretary, Sally McManus, told reporters in Canberra there was “no doubt” inflation was headed higher than 5.1% and, given productivity had grown more than 1%, the unions’ claim would not be inflationary.
McManus said it was “disturbing” that some employer groups had called for award pay increases to be delayed in some sectors such as hair and beauty, retail, accommodation and food services.
McManus said wage growth was needed for economic growth and employers could afford the increase, adding that workers were “not asking for much”.
“For these employer groups, there will never be a time when they will support pay rises. They are arguing against all available evidence against pay increases. They can afford it; they just do not want to pay it.”
