Australia's Fair Work Commission has announced a 4.75% increase in the minimum wage, affecting approximately 2.7 million workers on award wages, effective from July. An additional 100,000 of the lowest-paid employees will receive a 6% rise, lifting their hourly rate from $24.95 to $26.44.
The Commission's president, Adam Hatcher, cited the challenging economic context, including the Middle East conflict driving global oil prices and inflation. He noted that wage rates for most award employees remain lower than in mid-2021, before the post-Covid inflation spike.
Treasurer Jim Chalmers welcomed the decision, stating it strikes a balance and that decent pay is part of the solution to cost-of-living pressures. However, business groups warned that the increase could be a tipping point for some small businesses, particularly in retail and hospitality.
Economists have expressed concerns that the wage rise could add to inflationary pressures, potentially leading to another interest rate hike by the Reserve Bank of Australia. AMP economist My Bui forecast a rate increase in November, with the cash rate peaking at 4.85%.
