The Fair Work Commission has announced a 5.2 per cent increase to Australia’s minimum wage, giving the nation’s lowest-paid workers a $40-a-week pay rise starting July 1. 

This wage increase has been the highest in the last 16 years, equating to a rate of $812.60 per week or $21.38 per hour.  

Prime Minister Anthony Albanese welcomed the increase, stating the Fair Work Commission’s move to increase the minimum wage was the correct one and that low-paid workers deserved a real wage increase in light of rising inflation. 

“When you take into account the economic impact of this decision, it is the correct one,” the Prime Minister said. 

“(The commission) agreed effectively with the government submission, that the lowest-paid workers – who were on just $20.33 an hour (and) will now have that increase by just $1.05 an hour – didn’t deserve a real wage cut.” 

While the wage increase is said to take effect in July, those within the aviation, tourism and hospitality sectors will have to wait until October for the increase. 

Although the Prime Minister, as well as the public, have accepted the decision with open arms, key business groups have criticised it. 

Australian Industry Group’s Chief Executive Innes Willox stated that while no one was disputing the need for a wage rise, the consequences of a 5.2 per cent wage increase will fuel inflation across the country. 

“This wage increase will put a lot of pressure on business because they’re already under pressure with energy cost increases, interest rate rises and concerns around their own inflation,” he said. 

“It’s very much an issue for many employers who are telling us, particularly smaller ones, that they will struggle to pay this and they’ll have to make decisions around future employment.” 

Opposition Leader Peter Dutton has also laid out his concerns regarding the increase, as it could affect small businesses.  

“If it means businesses can’t afford those jobs, then I’m worried for those jobs,” Mr Dutton said. 

“I worry they’re not going to put the extra apprentice on or they’re not going to give those extra hours… that’s the economic reality, particularly in a high inflationary environment.” 

It comes as new figures show the national unemployment rate remained stable at 3.9 per cent in the past month. 

The Australian Retailers Association, which pushed for a 3.2 per cent rise, said businesses could be tipped “over the edge” with the increase. 

“Whilst the ARA supports an increase to the minimum wage for our frontline teams, the scale of this increase from the Fair Work Commission could send some businesses to the brink,” Australian Retailers Association Chief Executive Paul Zahra said.  

However, Australian Council of Trade Unions secretary Sally McManus said the rise in the minimum wage would help small businesses. 

“The biggest threat for small businesses is the fact that their customers don’t have money to spend,” she said. 

“If they have a further wage cut from all of the other employers and a lot of big business who can afford it, that is less money for small business.” 

Despite this, Ms McManus expressed her disappointment that workers in the aviation, tourism and hospitality would not see the pay rise until October. 

With AAP

Eliza Sayon

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Eliza is a content producer and editor at Public Spectrum. She is an experienced writer on topics related to the government and to the public, as well as stories that uplift and improve the community.

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