The new national minimum weekly wage will be $915.91 based on a 38-hour working week (up from $882.80), after the Fair Work Commission handed down its annual wage decision on Monday.

It will see the hourly minimum rate rise to $24.10 - up from $23.23.

In delivering its decision, the Commission said cost-of-living pressures had been a primary consideration and despite inflation slowing in the last year, it said low paid and low-income households continue to feel them.

“Modern award minimum wages remain, in real terms, lower than they were five years ago, notwithstanding last year’s increase of 5.75 per cent, and employee households reliant on award wages are undergoing financial stress as a result,” the Commission said.

It noted most employees who rely on award minimum wage rates are much more likely to be low paid and are “significantly different” to the workforce as a whole, mostly working part-time hours, are predominantly women while almost half are casual workers.

Economic considerations

At the same time, it noted it was “not appropriate” to increase wages above the inflation rate as productivity was “no higher than it was four years ago”.  

“We have also taken into account that modern-award-reliant employees will shortly receive the benefit of the Stage 3 tax cuts and the Budget cost-of-living measures, which are projected to increase real household disposable incomes over the next 12 months,” the Commission said.

Stage-3 tax cuts will deliver someone on the new minimum wage about $869 better off through the year.

The Commission said it was also concerned a bigger income jump may have hurt sectors typically staffed by minimum-wage workers.

"We have taken into account that the labour market and business profit growth overall remain strong, but the picture is less positive in some of the industry sectors which contain a large proportion of modern-award-reliant employees," it noted.

Inflation watch

The increase of 3.75% is broadly in line with both market forecasts and forecast wages growth across the wider economy in 2024.

The Commission said it expected the minimum wage rise would make only a modest contribution to overall wages growth in the year and is consistent with the forecast return of the inflation rate to below 3% in 2025.

The Reserve Bank of Australia has been adamant it will not cut interest rates until the inflation rate returns to its 2-3% target range.

The last annual CPI inflation data, released last week, put the annual inflation rate at 3.6%, according to the ABS monthly figures for April.

Competing submissions

The Australian Council of Trade Unions had been pushing for a 5% increase to the minimum wage while the federal government called for an increase in line with inflation.

Business and industry groups wanted a more modest increase of between 2-3%.

In Monday’s decision, the Commission also announced it had identified priority awards for addressing gender equity issues.

These included early childhood education and care workers, disability home care workers and other social and community service workers, dental assistants, medical technicians, psychologists, other health professionals and pharmacists.

Reviews will get underway into those sectors, the Commission said, with the intention of completing them by next year's wage review.


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