The Fair Work Commission has lifted minimum and award wages by 4.75 per cent from July this year.
This morning, in a decision handed down in Sydney, the fair work arbiter said while many employees were still worse off in “real terms” due to inflation, it was “not practicable or responsible” to deliver a wage increase that would fully compensate them for wages falling short of price pressures over several years.
However, the decision ensures the one in five employees who are paid according to minimum and award wages are not worse off in real terms compared to where they were in July 2025.
The increase falls short of the 5 to 6 per cent wage increase supported by the unions, but is higher than the 3.5 per cent to 3.9 per cent put forward by major employer and business groups.
In submissions leading up to the ruling, the Australian Council of Trade Unions pushed for a wage increase of 5 per cent to 6 per cent, arguing it was necessary to shield lower-paid workers from inflationary pressures.
Employer groups, meanwhile, put forward the case for lower wages with the Australian Industry Group asking for an increase to minimum and award wages of 3.9 per cent and the Australian Chamber of Commerce and Industry putting forward the case for a 3.5 per cent increase.
Ahead of the decision, economists said the minimum wage decision would have influence wider wage trends, with UBS tipping an increase of about 4.25 per cent.
While government officials refused to put forward a specific number for the minimum wage increase during public consultation hearings last month, Treasurer Jim Chalmers, in a doorstop interview in Canberra ahead of the decision on Tuesday, insisted the Labor government had made its views “very, very” clear. “Workers on the minimum wage and on awards need and deserve a decent sustainable real wage increase,” he said.
The most recent forecasts from Treasury and the Reserve Bank show that even if the conflict in the Middle East resolves within months, inflation will continue to climb, hitting 4.8 per cent by June according to the bank’s forecasts and 5 per cent according to the latest federal budget.
More to come
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Millie Muroi is the economics writer at The Sydney Morning Herald and The Age. She was formerly an economics correspondent based in Canberra’s Press Gallery and the banking writer based in Sydney.Connect via X or email.From our partners
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: www.smh.com.au
