Australia’s Fair Work Commission raises minimum wage to $18.93 an hour

 

The Fair Work Commission has awarded a $24.30-a-week increase in the minimum wage in its annual review.

The weekly minimum wage will rise by 3.5 per cent to $719.20. The new hourly rate is $18.93.

The commission rejected the ACTU claims for a record $50-a-week pay rise finding granting the claim would have adverse employment effects.

Most business groups had sought to limit the increase to $12.50 to $13.20 a week, but the restaurant and cafe sector and retailers called for a minimum wage freeze.

The new minimum wage will come into operation on July 1, the same day as the second round of penalty rate cuts in certain industries will apply.

ACTU secretary Sally McManus said the increase was significant as it was the highest percentage increase ever awarded by the commission.

“It is a step forward to a living wage but it’s not a living wage,”’ she said.

Ms McManus said the 3.5 per cent increase equated to $26.71 per week for a hospitality worker or $24.33 for a horticulture worker.

Australian Industry Group chief executive Innes Willox said the “excessive” increase had the potential to be a major disincentive to employment

As well as the $24.30 per week increase to the national minimum wage, the 3.5 per cent rise equates to a $28.30 increase to the base trade rate and an increase of up to $47 per week to the award rates for professionals.

Workplace Minister Craig Laundy said the commission had delivered a carefully considered and balanced outcome.

Highlighting the commission’s rejection of the ACTU claim, Mr Laundy said the government had always supported a balanced wage increase, contrary to claims by the union movement.

The Australian Chamber of Commerce and Industry said the national minimum wage was now “close to, if not, the highest in the world”.

The Australian Retailers Association said the increase would certainly have a negative effect on retailers and could potentially result in job losses.

In its decision, the commission said the wage forecasts in the recent federal budget “appear overly optimistic”, particularly as the RBA expects increases in wages growth to be gradual and the unemployment rate is only expected to decline slightly, to 5.25 per cent by 2019–20

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