Australia’s minimum wage and award wages will increase by 3.75 per cent from July 1, the Fair Work Commission has announced.
The decision will see the national minimum wage increase to $24.10 per hour and $915.91 per week, based on a full-time, 38-hour working week.
It is an increase of about $33 a week to the current minimum wage, and affects about 2.6 million workers — equivalent to 20.7 per cent of the national workforce.
Overall, the Fair Work Commission (FWC) estimates the increase to minimum and award wages will affect “about a quarter of all Australian employees”.
“The increase of 3.75 per cent which we have determined is broadly in line with forecast wages growth across the economy in 2024 and will make only a modest contribution to the total amount of wages growth in 2024,” the commission said.
“We consider therefore that this increase is consistent with the forecast return of the inflation rate to below 3 per cent in 2025.”
The FWC said the increase to the minimum and award wages would have a “limited” effect on the broader economy, noting employees who relied on modern award minimum wage rates were “significantly different” to the entire Australian workforce.
“They mostly work part-time hours, are predominantly women, and almost half are casual employees. They are also much more likely to be low paid,” the commission said.
In delivering its decision, the FWC said living standards, higher living costs and workforce participation were major considerations in determining the increase to the minimum and award wages.
“In determining this level of increase, a primary consideration has been the cost-of-living pressures that modern-award-reliant employees, particularly those who are low paid and live in low-income households, continue to experience notwithstanding that inflation is considerably lower than it was at the time of last year’s review,” the commission said.
The FWC noted that modern award minimum wages remained lower than they were five years ago, in real terms.
However, the FWC deemed it was “not appropriate” to increase award wages “by any amount significantly above the inflation rate”.
The Australian Council of Trade Unions had argued for an increase of 5 per cent to the minimum wage, and the federal government had pushed for an increase in line with inflation.
Business groups had wanted a modest increase, with the Australian Commerce of Chamber and Industry (ACCI) calling for an increase no greater than 2 per cent, while the Australian Industry Group (Ai Group) had proposed a 2.8 per cent increase.
“We have taken into account that the labour market and business profit growth overall remain strong, but the picture is less positive in some of the industry sectors which contain a large proportion of modern-award-reliant employees,” the commission said.
“We have also taken into account that modern-award-reliant employees will shortly receive the benefit of the stage 3 tax cuts and the budget cost-of-living measures, which are projected to increase real household disposable incomes over the next 12 months.”
Posted , updated