Anthony Albanese announces support for minimum wage increase as election campaign heats up

Anthony Albanese has defended backing an above-inflation pay rise for about three million of Australia’s lowest paid workers.

The Prime Minister says Labor is backing the country’s lowest paid workers to get ahead with a wage rise above inflation, despite criticism it is its submission on wages to the Fair Work Commission.

On Wednesday, Labor announced its submission to the Commission recommends “an economically sustainable real wage increase” for Australia’s award and minimum wage workers.

Previously, the Albanese government has pushed for the real wages of such workers to not go backwards. Now it is shifting to advocating for an increase above inflation.

Real wages are wages adjusted for inflation, meaning if your wage goes up, but the cost of living rises faster, your real wage has actually gone down.

“I’ll tell you what is important too, as a Labor government: not leaving people behind. That’s a core value we have,” Anthony Albanese told reporters on the May 3 election campaign in Melbourne on Wednesday.

Anthony Albanese was at a childcare centre to spruik Labor’s minimum wage submission which would benefit childcare workers. Picture: Jason Edwards / NewsWire

“We don’t leave people behind and we don’t hold people back.

“We stand for people who are vulnerable in our community, including those people who are doing it tough because they’re on minimum or award wages.”

But it has been criticised for failing to factor in an improvement in productivity.

“Our whole agenda is about productivity,” the prime minister said.

“Whether that be the investment in the future economy through the Future Made in Australia, whether it be the work that Ed Husic is doing on data, on technology, on IT, all of that work.

“Whether it be the upskilling of the workforce; that is about boosting productivity as well.

“We have a sustainable agenda there, our competition agenda, including the incentive that the treasurer’s put in place for the states to have productivity reform is there as well.”

Anthony Albanese said the government was taking the issue of productivity seriously. Picture: Jason Edwards / NewsWire

The national minimum wage was set at $24.10 an hour last year. Meanwhile, headline inflation was at 2.4 per cent for the December quarter while underlying was 3.2 per cent – just outside the Reserve Bank’s target of 2-3 per cent.

Labor’s position, in its submission to Fair Work, is that any increase in minimum and award wages should be consistent, which is to say contingent, on inflation returning “sustainably” to the RBA’s target band.

“Labor submits that this outcome is both fair and economically responsible,” the party writes in its submission to the commission.

“Labor believes workers should get ahead with a real wage increase. Despite heightened global uncertainty and volatility, the Australian economy has turned a corner. Inflation is now less than one third of its peak, unemployment remains low, there are over a million additional people employed than in May 2022, and interest rates have started to come down.

“Economic growth rebounded at the end of last year and the private sector is now a key contributor to growth. Importantly, real wages growth has now returned and is forecast to continue across 2024-25 and 2025-26.

“A soft landing in our economy looks more and more likely. While the global economy is uncertain and Australians are still under pressure, Labor has made substantial progress in turning the economy around.”

The submission continues in much the same vein, stressing the Albanese government “is focused on finishing the fight against inflation, delivering responsible cost of living relief and building a stronger economy and stronger budget”.

But it also notes some substantive, relevant statistics.

The Prime Minister, Employment Minister Murray Watt and Penny Wong spruiked their wages bid at a childcare centre in Melbourne. Picture: Jason Edwards / NewsWire

It notes about 2.9 million Australian workers have their pay set by an award, and that the current national minimum wage is $24.10 per hour.

“Low paid workers and their families are particularly affected by cost of living pressures, because they typically have limited liquid asset buffers to draw on to cover rising costs and they are less able to deal with unexpected expenses,” says the submission.

“Award-reliant workers, many of whom are low paid, are more likely to be women, employed on a casual basis, working part-time hours and young.

“Around 20 per cent of the lowest paid employees provide for financially dependent children and nearly 40 per cent have a mortgage.”

The argument is that raising real wages for low paid workers will help about three million people, such as cleaners, retail workers and early childhood educators.

“During the last campaign, as I travelled around the country, I was asked if I supported a wage increase for low paid workers. I said absolutely,” said Mr Albanese.

“The Liberal Party said this would wreck the economy. Since then, we’ve seen wages going up, inflation coming down and interest rates starting to fall.

“This campaign, we will again be advocating for workers to get a pay rise to not only help them deal with the pressures of today, but to get ahead in the future.

“Only Labor has a plan to build Australia’s future.”

“Our economic plan is all about ensuring Australians earn more and keep more of what they earn,” said Treasurer Jim Chalmers.

“Boosting wages, cutting taxes for every taxpayer and creating more jobs are a central part of our efforts to help Australians with the cost of living.

“The biggest thing standing in the way of higher wages for Australians is a Peter Dutton-led Coalition government that will raise taxes and lock in lower wages for workers.

“The choice at this election is between a Labor government which has been creating jobs, getting wages moving again, rebuilding living standards and rolling out responsible cost of living help versus a Coalition that wants Australians working longer for less.”

Originally published as Anthony Albanese announces support for minimum wage increase as election campaign heats up