Australia's Fair Work Commission has announced a 4.75% pay rise for about 2.7 million workers on award wages, effective July, with an additional 6% increase for approximately 100,000 of the lowest-paid employees. The decision lifts the minimum hourly rate from $24.95 to $26.44, raising the weekly wage for a 38-hour week from $948 to just under $1,005.
Commission President Adam Hatcher described the decision as 'particularly challenging' amid global oil price surges linked to the Middle East conflict, which have pushed inflation higher. He noted that wage rates for most award employees remain below mid-2021 levels, justifying 'additional measures' to protect the lowest paid.
Treasurer Jim Chalmers welcomed the ruling, stating it 'strikes a very effective balance' and that decent pay is 'part of the solution, not part of the problem'. The minimum wage has risen by 30% since Labor took office in May 2022, or 12% after adjusting for cost of living.
However, business groups expressed concern. David Alexander of the Australian Chamber of Commerce and Industry warned the increase 'could be the tipping point for some businesses', particularly in retail, hospitality, and accommodation, if they cannot pass on higher costs. The ACTU's Sally McManus countered that workers are also customers, and cutting their pay would reduce spending.
Economists are divided on the inflationary impact. AMP's My Bui estimated the decision would add 0.6 percentage points to wages growth but warned it could fuel larger pay claims and 'sticky services inflation', potentially prompting a Reserve Bank rate hike to 4.85% by November.
