Australia hikes minimum wage by 5.2% amid inflation pressures
SYDNEY — Australia's independent wage-setting body on Wednesday (June 15) raised the national minimum wage by 5.2 per cent, largely in line with inflation, bringing respite to families tackling soaring living costs and higher energy prices.
The lowest-paid employees will receive A$21.38 (S$20.57) an hour from July 1, up from the current rate of A$20.33, the Fair Work Commission said after its annual review, a decision which it said would affect more than 2 million workers.
"The low-paid are particularly vulnerable in the context of rising inflation," said Justice Iain Ross, president of the Fair Work Commission, pointing to "a sharp rise" in living costs and possible further rise in inflation for the decision.
With the unemployment rate at 3.9 per cent, the lowest in almost 50 years, Mr Ross said the decision "will not have a significant adverse effect on the performance and competitiveness of the national economy."
Prime Minister Anthony Albanese this month sought to ensure real wages did not go back. The new centre-left Labor government, during its election campaign, backed an inflation-matching 5.1 per cent rise in minimum wages.
Reserve Bank of Australia Governor Philip Lowe on Tuesday said consumer price inflation was now likely to reach 7 per cent by the end of the year, from the current pace.
Trade unionists said they were "really happy" describing the decision as "reasonable and fair" while businesses warned the hike in wages would put more strain on operations and was a "significant risk to economy."
Unions were seeking a 5.5 per cent rise in wages, while businesses recommended an increase in the 2.5-3 per cent range.
Australian Chamber of Commerce and Industry (ACCI) said the decision would add about A$8 billion in expenses for businesses over the year, which are already under pressure from a spike in input costs and a tightening labour market.
"(The wage hike) veers very much towards the upper end of the range of possible outcomes that we could have expected," ACCI chief executive Andrew McKellar said. REUTERS