The Fair Work Commission has this morning approved a 5.75% increase in all award rates and an effective 8.6% rise in the national minimum wage.
The national minimum wage rise is nominally the same 5.75% applying to awards, but because the national minimum wage is now based on the C13 rate in the manufacturing award, rather than the C14 rate that has previously applied, it is based on a higher floor, providing a one-off higher increase.
The decision will lift the national minimum wage from $812.60 to $882.80 a week and from $21.38 to $23.23 an hour.
Fair Work Commission President and panel head Adam Hatcher said this morning: “Because of the negligible proportion of the workforce to which the national minimum wage applies, this outcome will not have discernible macroeconomic effects.”
Justice Hatcher said the Fair Work Commission applies to just 0.7% of all Australian employees.
Turning to the rise for award rates, he continued that “[a]s the total wages of modern award reliant workers constitute a limited proportion of the wage bill, we are confident that the increase we have determined will make only a modest contribution to total wages growth in 2023-24 and will consequently not cause or contribute to any wage price spiral”.
“We acknowledge that this increase will not maintain the real value of modern award minimum wages, nor reverse the reduction real value which has occurred over recent years.
“However, the level of wage increase we have determined is, we consider, a base that can reasonably be justified in the current economic circumstances.
“In the medium to long-term, it is desirable that modern award minimum wages maintain their real value and increase in line with the trend rate of national productivity growth,” he said.
“A return to that path is likely to be possible in future reviews when there is a reversion to a lower inflationary environment and trend productivity growth,” the president said.
The decision follows the Albanese Government making submissions asking the panel to ensure that the real wages of low-paid workers “do not go backwards” and the ACTU seeking a 7% rise across all award rates, which is in line with the March Quarter annual inflation rate and employers supporting an increase of up to 3.8%.
The panel – President Adam Hatcher, Vice President Joe Catanzariti, Deputy President Ingrid Asbury, Commissioner Peter Hampton and lay members Adele Labine-Romain, Marian Baird and Mark Cully – made a unanimous decision.
The RBA warned this month that if the Fair Work Commission awards a “large” minimum pay rise, it could lead to a wage-price spiral.