The Australian government has urged the Fair Work Commission to grant a pay rise to the nation's lowest-paid workers, arguing that upcoming tax cuts should not be used as a substitute for wage increases. In its submission for the 2023-24 Annual Wage Review, the government emphasised that low-paid workers cannot afford to see their wages go backwards during the cost-of-living crisis.
The submission, to be made on Thursday, notes that tax cuts scheduled for July are designed to be in addition to any wage increase awarded by the commission. Under the revised tax plan, the lowest income tax rate will drop from 19 to 16 cents in the dollar, benefiting workers on the first $45,000 earned. The second rate will fall from 32.5 to 30 per cent for incomes up to $135,000.
Treasurer Jim Chalmers stated that the government will recommend the commission ensure real wages for low-paid workers do not decline. 'We believe one of the best ways to ensure workers can deal with cost-of-living pressures is to ensure they earn enough to provide for their loved ones and to get ahead,' he said.
While inflation has moderated to 4.1 per cent and employment remains low, the government warned that low-income Australians still bear the brunt of economic challenges, lacking savings to cover rising costs. The commission previously raised wages by 5.75 per cent in June 2023, increasing the national minimum wage to $882.80 per week.
The government did not call for automatic inflation-linked wage increases across the board, stressing that productivity should drive long-term real wage growth. The Fair Work Commission is expected to announce its decision later in 2024.
