Bosses want wage rise to be below inflation

Unions accuse employers of supporting real wage cuts for low-paid workers.

Australian Industry Group chief executive Innes Willox and Workplace Relations Minister Tony Burke are at odds over the next minimum wage increase.

National employers have called for this year’s annual minimum wage rise for 2.9 million workers to be less than 2.8 per cent, sparking union criticism that employers are backing real wage cuts for low-paid workers

Australian Industry Group chief executive Innes Willox said future employment, inflation and interest rate paths would be at risk if the ACTU’s “reckless” 5 per cent claim was backed by the Fair Work Commission.

Despite a rise under 2.8 per cent being below the headline inflation rate – 4.1 per cent in the December quarter and 3.4 per cent in the latest monthly data released on Wednesday – Mr Willox argued the AI Group position would “deliver a real increase in the disposable incomes of many workers when the additional benefits from tax relief and increased levels of government support are taken into account”.

In contrast to employers, the government says the commission should not take into account the revamped stage three tax cuts when determining the amount and should award a rise in line with inflation that ensured workers’ pay did not go backwards.

Workplace Relations Minister Tony Burke released an analysis by his department of 10 years of ABS wage price index data showing wages growth was up in every state and territory since the Albanese government came to office.

The analysis found wages growth nationally was roughly double what it averaged under the Coalition government.

In its submission, the Australian Chamber of Commerce and Industry said an increase in minimum and modern award wages of no more than 2 per cent was “fair, reasonable and responsible”.

The chamber said a substantial increase in minimum and modern award wages without a sustained increase in labour productivity would add to inflationary pressure.

In response to the employers’ position, Mr Burke told The Australian: “I know the business groups probably became used over the course of a decade to governments that would back pay cuts for workers. That’s not how the Albanese Labor government works.”

ACTU president Michele O’Neil said the Ai Group position “would see workers on the minimum wage go backwards”.

“The myth that giving a pay rise to cleaners, carers and hospitality workers will trigger inflation has been debunked time and time again,” she said.