As many as 2.8 million Australians will see an increase in their pay package from Friday when the annual fair review of the Fair Work Commission comes into force.
Friday marks the start of the new fiscal year, which means the FWC’s decision to raise the national minimum wage will apply.
The industrial referee revealed in mid-June his decision to raise the minimum wage to $ 812.60 a week.
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That equates to $ 21.38 an hour.
However, workers in the aviation, tourism and hospitality sectors will not receive their salary increases until 1 October.
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“This level of increase will protect the real value of the wages of the lowest workers,” said FWC President Judge Iain Ross.
Ross also announced a 4.6 percent increase in modern minimum award wages, subject to a minimum increase of $ 40 per week.
The cost of living was at the forefront of the FWC’s decision, Ross said.
“Given the sharp rise in the cost of living since last year’s revision, the increases we granted last year have led to a fall in the real value of the national minimum wage and modern adjudication minimum wages. “, he said.
Last year, the minimum wage rose 2.5% to $ 772.60 a week.
But with the rate of inflation outpacing wage growth, pay packages became a feature of the recent election campaign.
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Prime Minister Anthony Albanese had previously advocated for an increase that equals the rate of inflation.
“In considering its decision on wages for this year, the government recommends that the Fair Labor Commission ensure that the real wages of low-wage workers in Australia do not fall back,” the government said in its presentation.
“High and rising inflation and weak wage growth are reducing real wages across the economy and creating pressures on the cost of living for low-paid workers.”
The unions, for their part, pushed for a 5.5% increase, which they say would prevent a real reduction in workers’ wages.
“We teach that minimum wages and premiums must grow to ensure that premium-dependent households can cope with the rising cost of living they face and enjoy their fair share of productivity growth,” said the Australian Council of Trade Unions.
It comes when the governor of the Reserve Bank of Australia, Dr Philip Lowe, warns that inflation could continue to rise this year.
“We will do whatever it takes to bring inflation back to 2 or 3 per cent. We don’t need to get it back immediately, we’ve had a flexible inflation target in Australia for a long time,” he said on ABC’s 7.30 program.
“I think the peak will be in the December quarter of this year, and when we get to the second half of next year, inflation will go down clearly, but in the first quarter we will see lower overall inflation rates.”
Archive image: Millions of Australians will receive a pay rise after the Fair Labor Commission issues its annual decision. Credit: AAP
The RBA increased its cash rate by 0.5% last month, the highest monthly increase in more than 20 years.
Lowe, in announcing the increase, said it represented a withdrawal from the “extraordinary monetary support” provided through the pandemic.
But, he also foreshadowed that more ascents were likely.
“The resilience of the economy and higher inflation make this extraordinary support no longer necessary,” he said.
“Given current inflationary pressures on the economy and the still very low level of interest rates, the council decided to move by 50 basis points.
“The board hopes to take further steps in the process of normalizing monetary conditions in Australia over the coming months.”