Unions want $43-a-week more for the lowest paid

Unions will seek a $43-a-week rise for the nation’s lowest paid, in a pre-election claim that will be strongly opposed by employers.

ACTU Secretary Sally McManus. Picture: Kym Smith

Unions will seek a $43-a-week increase for the nation’s low-paid in a pre-election claim to the Fair Work Commission that will be strongly opposed by employers, who want the annual minimum wage rise limited to $12.95-a-week in line with the inflation rate.

ACTU secretary Sally McManus said unions would push to lift the minimum wage by 6 per cent to $762.20 a week in June and, if successful, by a further 5.5 per cent next year to bring the minimum wage to 60 per cent of median earnings.

The ACTU claim, significantly higher than the above-inflation $24.30-a-week rise granted by the commission last year, puts unions on a collision course with national employers, who will call for a much smaller increase.

The Australian Chamber of Commerce and Industry will urge the commission to grant a maximum $12.95-a-week increase, describing it as an “appropriate and prudent level of increase”.

Scott Barklamb, the chamber’s workplace relations director, said a 1.8 per cent increase would see the minimum wage keep pace with price increases, while maintaining the purchasing power and living standards of lower-paid workers.

He said the commission should be taking into account downward revisions in global and domestic economic forecasts, low productivity growth and the need to create jobs for 1.7 million unemployed and underemployed Australians.

Ms McManus called for the commission to reach the 60 per cent target by July next year, but Fair Work president Iain Ross has previously rejected union bids to have the tribunal set a medium-term minimum wage target.

Labor has ruled out legislating a 60 per cent target if it wins the election, but is looking at amending the Fair Work Act to change the factors the commission takes into account when determining the minimum wage.

Labor finance spokesman Jim Chalmers told ABC-TV that the ALP was “not prepared to come at that, at this stage, the 60 per cent”.

Ms McManus said the commission should close the gap between the minimum wage and the OECD definition of relative poverty within two years. A 10.7 per cent increase, $72.80 a week, was necessary this year to guarantee no full-time Australian worker lived below the poverty line.

The ACTU says the commission should award $43 a week this year and, assuming a 1.5 per cent increase in the median wage, an additional 5.5 per cent next year.

In its decision last year, the commission said increasing the minimum wage to $18.93 an hour would not lift all workers out of poverty. However, it said granting an increase big enough to immediately lift all workers out of poverty would lead to a substantial risk of adverse employment effects.

The ACTU said workers on the minimum wage desperately needed a pay rise to help them make ends meet as the cost of living continued to rise faster than wages.

“No one in Australia should be forced to work below the poverty line but that is exactly what the current minimum wage guarantees,” Ms McManus said. “Within two years, we can make sure no full-time working Australian lives in poverty while also stimulating spending and generating economic activity and growth.”

She said in arguing against raising the minimum wage to a living wage, the business lobby and the government were “saying it is OK for Australians to live below the poverty line”.

“It shows exactly how out of touch big corporations and the government are from everyday Australians that they think workers living in poverty is an acceptable outcome of wages policy.’’

The commission increased the minimum wage by 3.5 per cent last year and 3.3 per cent in 2017. The annual increase flows through to about 2.3 million workers.

The increase will coincide with the latest round of penalty rate cuts on July 1. Labor has promised to reverse the penalty rate cuts.