Unions in push for $50-a-week minimum pay rise

Unions will push for a record $50-a-week pay rise for the nation’s lowest-paid, more than double that awarded last year.

ACTU secretary Sally McManus wants to bring the minimum wage up to 60 per cent of the median wage. Picture: AAP

Unions will push for a record $50-a-week pay rise for the nation’s lowest-paid, more than double the amount awarded last year.

ACTU secretary Sally McManus has declared a big increase is needed to address low wages growth, penalty-rate cuts and rising living costs.

In the biggest one-off dollar-terms rise sought to the national minimum wage, the ACTU will urge the Fair Work Commission today to increase the rate from $694.90 to $744.90 a week, equivalent to a 7.2 per cent rise that unions will seek to flow on to an estimated 2.3 million workers.

Employers warned granting the “extraordinary, ambit” claim would force small businesses to lay off employees and reduce trading hours. Business groups will seek to limit the increase to $12.50 to $13.20 a week.

Awarding the ACTU claim would lift the national minimum wage’s hourly rate from $18.29 to $19.60, or by $2600 annually to $38,735 a year. The commission last year awarded a $22.20-a-week rise, equivalent to a 3.3 per cent increase, the largest minimum wage rise in dollar terms since 2010. According to the ACTU submission, applying the 7.2 per cent rise would lead to some award-reliant workers receiving weekly increases ranging from $55.14 to $84.39.

Ms McManus said the claim was part of the union movement’s long-term strategy to bring the minimum wage up to 60 per cent of the median wage.

“With record low wages growth holding us back, penalty-rate cuts kicking in and bills and rent rising faster than ever, there has never been a better time for a big pay rise for Australians,’’ Ms McManus said.

“People should not work full-time and struggle to pay for the ­basics of life. We need to restore a living wage. Low wages growth is pushing our economy off course. It’s not just working people saying that, the Reserve Bank and Treasurer Scott Morrison agree.”

Australian Industry Group chief executive Innes Willox said the commission needed to take a cautious approach and limit this year’s increase to $12.50 a week, or 1.8 per cent.

“Australia already has one of the highest national minimum wage rates in the world, and most Australian workers are entitled to award-wage rates that are higher than the national minimum wage,’’ Mr Willox said.

“Currently, background inflation in Australia is weak and this means that a smaller minimum wage increase will generate real wage increases for workers, ­including those in low-wage jobs. Now is not the time to take risks with minimum wage setting.”

 

Australian Chamber of Commerce and Industry chief executive James Pearson said small business could afford a maximum $13.20-a-week rise, equivalent to 1.9 per cent, and higher than the 1.2 per cent argued for by the chamber last year.

Mr Pearson said that although there were signs the economy was picking up, the outlook was patchy and many award-reliant small businesses were struggling. The ACTU claim would risk small business and jobs, he said, noting that the commission had awarded eight consecutive above-inflation increases to the minimum wage.

“Let think about the local newsagency,’’ he said. “If they are faced with that sort of increase in their wages bill, what are they likely to do? They might have to let people go, they might have to close the shop down for a couple of hours a day if they can afford to.

“At the end of the day, small businesses will close their doors or let people go, and that’s the folly of the ACTU claim. It ignores the ­capacity of small business, who overwhelmingly have their wages determined by the Fair Work Commission, to pay.”

Mr Willox said last year’s 3.3 per cent rise was “exceptionally high”, and an excessive increase this year would reduce the job ­security of low-paid workers and lessen job opportunities for the ­unemployed and underemployed.

“Despite some improvements in GDP and employment growth, national disposable income growth remains weak … Businesses are under pressure. Steep ­energy price rises are proving difficult to pass on to customers and are squeezing margins across a wide range of industries. Also, productivity growth has been exceedingly weak over the past decade and over the current productivity growth cycle.”

Jobs Minister Michaelia Cash said the government acknowledged that wages growth had been sluggish. “The government has made it very clear we expect employers to now start passing on the profits that they are making in terms of wages growth,’’ she said. “But again, as I said, if you don’t get the basic economic fundamentals right, employers cannot be profitable. You need profitable employers, you need an economy creating jobs, and that does ultimately flow through to wages growth.”

Workplace Relations Minister Craig Laundy said the government would leave it to the ­commission to determine an ­appropriate outcome “unlike the ACTU and Labor who have ­released policies to override the ­independent umpire”.

Opposition workplace relations spokesman Brendan O’Connor said Labor would urge the commission to increase the minimum wage but he did not specify a desirable amount yesterday.