Federal government to back real wages pay rise
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The news: The federal government will recommend a pay increase for low-paid workers in its submission to the Fair Work Commission’s annual wage review.
The numbers: The current national minimum wage is just over $45,900 a year, around 55% of median full time earnings.
The context: In its draft submission to the Commission, the government recommends that real wages for Australia’s low-paid workers do not go backwards and emphasises that a pay increase should come in addition to cost of living tax cuts rather than as a substitute.
The current economic circumstances are challenging, as global uncertainty, high inflation and higher interest rates weigh on activity, a draft of the submission reads.
The submission adds that while inflation has moderated it is still above the RBA’s 2%-3% target, and while inflation is expected to moderate further, the current environment remains challenging, with many households experiencing cost of living pressures.
“The Government’s cost-of-living tax cuts will allow workers to keep more of what they earn. These tax cuts will provide meaningful cost-of-living relief in a way that does not add to inflationary pressures and are designed to be in addition to any increase in award and minimum wages granted by the Fair Work Commission in this review,” the draft submission states.
“This submission does not suggest that across-the-board, wages should automatically increase with inflation, nor that inflation should be the only consideration in determining wages […] There is no sign of a wage-price spiral developing in Australia and medium-term inflation expectations are well anchored”
What they said: Treasurer Jim Chalmers said: “Our economic plan is all about helping Australians earn more and keep more of what they earn, which is why we’re focused on delivering strong and sustainable wages growth and why we’re giving a tax cut to every Australian taxpayer on 1 July this year. Peter Dutton wants Australians to work longer for less, but we take a different view.”
The source: Treasury press release
