Employers group says national minimum wage should rise by only 1.1%

The national employer organisation, the Australian Industry Group (Ai Group), is pushing for a “cautious rise” of only 1.1% to the National Minimum Wage and to award wage rates, the organisation announced yesterday (Thursday).

Australia’s Fair Work Act requires that the Fair Work Commission must hand down its decision on any minimum wage increase by 30 June this year.

While Australia’s economy has bounced back at a faster and stronger pace than had been anticipated, the Ai Group warned that the effects of the pandemic and recession were ongoing.

Increase for low-paid workers equal to 3.2%

This warranted a very cautious approach in determining the level of any minimum wage increase this year.

“When added to the 0.5% Superannuation Guarantee increase that is operative from 1 July, and the equivalent of a 1.6% increase in pre-tax income that an employee on the National Minimum Wage will receive in coming months as a result of the personal income tax changes introduced in the 2020-21 Budget, our proposal would result in the equivalent of a 3.2% increase in remuneration for low-paid employees,” the group noted in a statement.

It said awarding a modest increase in the National Minimum Wage and award wages would encourage employers to put on more staff and to increase the hours of work for existing workers.

“Consistent with longstanding past practice, it is appropriate that the Fair Work Commission take into account the increase to the Superannuation Guarantee and the decrease in personal taxation when determining the quantum of any minimum wage increase in the Annual Wage Review,” Ai Group Chief Executive, Innes Willox, said.

Economic loss and recovery has been uneven

“The distribution of economic loss and recovery has been extremely uneven to date across locations, industries, occupations and demographic groups around Australia.

“A minimum wage increase is a very blunt instrument and cannot be readily tailored to the needs of particular employees and businesses.”

Willox said the group’s proposed increase of 1.1% was equivalent to the latest headline annual inflation figure of 1.1% for the first quarter of 2021.

Together with its partner organisations, the Ai Group represents more than 60,000 businesses employing more than 1-million staff in sectors such as manufacturing, construction, engineering, transport & logistics, labour hire, mining services, the defence industry, civil airlines and ICT.