AUSTRALIA’S lowest paid workers will get $15.80 extra a week, after the Fair Work Commission handed down its annual minimum wage decision.
Fair Work Commission president Justice Iain Ross handed the decision down at 2.15pm today, saying the nation’s lowest paid workers will get a wage increase of 2.4 per cent.
This means workers will now get $672.70 per week or $17.70 per hour.
The Commission said the decision to lift wages affects more than 1.86 million employees in Australia.
Last year the minimum wage increased by 2.5 per cent to $656.90 per week or $17.29 an hour.
The changes to the national minimum wage will kick in on July 1, 2016.
The wage increase was half of what the ACTU wanted, which was $30 a week extra for workers.
But the increase is above what business groups argued for, which was a rise of between $7.90 — $10.50.
Retailers have also warned they may have to slash their workers’ hours or put a freeze on hiring new staff after the national minimum wage was increased.
Russell Zimmerman from the Australian Retailers Association said the wage rise was double what his members were hoping for, and far higher than many could afford.
“This is a big problem for the industry and unfortunately I think retailers will have to look at their payrolls and may well have to decide whether they can reduce hours even further,” Mr Zimmerman said.
“Certainly what it will do is make sure that no more people are employed at the moment … that’s a very sad state of affairs for the industry.” Mr Zimmerman said the industry was only experiencing around 3.6 per cent annual growth, with some states languishing far behind on as little as 0.9 per cent.
“If you’ve a large workforce, say 1000 people, and you’ve got a (wage) increase of around $17.70 per week, that’s a big slug on your wage bill,” he said.
“When you’re looking at an industry that’s struggling to maintain its numbers this is not a good outcome, really.”
Mr Ross said the wage increase would help improve the living standards of the nation’s poorest workers.
“Some low paid award reliant households have incomes that places them below the poverty line,” he said.
He also said the wage increase was a “modest improvement” which would not lead to “inflationary pressure”.
“The level of increase … will not lead to inflationary pressure and is highly unlikely to have any negative impact on employment,” he said.
Mr Ross said the general economic climate is robust amid continued improvement in productivity and historically low levels of inflation and wages growth.
“The prevailing economic circumstances provide an opportunity to improve the relative living standards of the low paid,” he said.
The news comes as the Federal Election campaigns of both major parties has been focused on the nation’s lowest paid workers.
Prime Minister Malcolm Turnbull has been campaigning in Sydney promoting his innovation agenda and medical research.
Up in Cairns, Opposition Leader Bill Shorten will announce Labor’s plan to redirect $1 billion of funding earmarked for Northern Australia infrastructure to a specific fund for tourism facilities like airports and convention centres
The independent Fair Work Commission is also weighing up changes to penalty rates but a decision won’t be released until after the July 2 election.
Mr Turnbull recently said the Coalition had no plans to alter penalty rates, unlike Mr Shorten, as the Labor leader had a “chaotic” position on penalty rates.
“We have no plans to change penalty rates whatsoever — it is a matter for Fair Work,” he said.
“Mr Shorten not so long ago … said he agreed with that and immediately various colleagues of his started to crab walk away from it and suggested they had a different position.”
The opposition leader said Mr Turnbull, a former investment banker, always backed the big end of town.
“Why is it that the Liberals always have a view about what people who get $50,000 and $60,000 a year are earning but completely silent about CEOs on $5 million and $6 million?” he said.
“Inequality in this country is growing, it is at a 75-year high.”