The Albanese government has signalled that boosting the minimum wage and various award wages will be a primary focus moving forward. This initiative follows a pre-election commitment made by Prime Minister Anthony Albanese to the Fair Work Commission (FWC), advocating for a raise above inflation for approximately 2.9 million Australian workers. Although specific figures regarding the proposed increase remain undisclosed, Albanese emphasised that an uplift in wages is necessary to aid the lowest-paid individuals in securing a better quality of life.
Addressing the rising cost of living, Albanese noted that part of the government’s strategy is not only to reduce inflation but also to enhance wages while ensuring robust employment levels. The current minimum wage stands at $24.10 per hour or $915.90 weekly.
According to KPMG, inflation is projected at 2.5% for the current financial year, potentially escalating to 3% in 2025-26. A proposed 3% wage increase would equate to an additional 71 cents per hour, or $27 weekly. A more substantial increase of 3.5% could provide workers with an extra 84 cents per hour, totalling $32 per week. Albanese has urged the FWC to consider a viable and sustainable wage increase for Australia’s award workers, particularly highlighting the financial strains faced by low-income families.
The Labour government’s submission underscored that low-paid workers often have limited savings and are ill-equipped to manage escalating costs or unexpected financial burdens. Furthermore, many award-reliant workers are women, casual employees, younger individuals, or those in part-time positions.
A further submission regarding wage adjustments will be presented to the FWC by Labor within the week. This call for a wage increment has generated diverse opinions across industry sectors. The Australian Council of Trade Unions advocates for a 4.5% increase, which would raise the minimum wage by approximately $1.08 per hour to $25.18, or $956.84 weekly. ACTU Secretary Sally McManus has stressed that the existing minimum wage—just $47,626 annually—is inadequate for full-time workers.
Conversely, business representatives advocate for more modest increases. The Australian Restaurant and Cafe Association suggests a 2% raise, adding approximately 48 cents to the hourly wage, which translates to an additional $18.31 weekly. They warn that significant wage increases may result in higher costs for consumers, asserting that wage adjustments should reflect cost-of-living changes rather than performance enhancements.
Both the Australian Chamber of Commerce and Australian Industry Group have called for more conservative raises, recommending increases of 2.5% and 2.6%, respectively. The FWC undertakes an annual wage review commencing in March, evaluating all submissions, with expectations of a decision typically delivered in early June. The new wage levels are usually implemented on July 1.
For context, past adjustments include a 5.2% increase in 2022 when inflation peaked at 7.8%, followed by an 8.6% rise in 2023 and a subsequent 3.75% hike in 2024.
In summary, the discourse surrounding minimum wage increases is heated, with advocates for lower wages citing potential adverse effects to businesses and employees calling for sustainable increases to combat rising living costs. The outcome of the FWC’s review will be pivotal for millions of Australian workers as they navigate a challenging economic landscape.
