Pressmediaofindia
Related Articles
26-03-2024
SYDNEY: Australia’s government will support a minimum wage increase in line with inflation this year as low-income families continue to grapple with costs of living, although the rise would be smaller as inflation eased.
In a submission to the Fair Work Commission’s 2023-24 Annual Wage Review to be unveiled on Thursday, the Labor government will recommend the increase to ensure “the real wages of the low-paid workers do not go backwards”, a position the government has held in the last two years.
“Certainly the expectation is that the minimum wage will be lifted. What we’re trying to ensure is that people on the lowest pay in our economy and in our country don’t go backwards,” Treasurer Jim Chalmers said in a TV interview on Monday.
“This is all about ensuring that people can earn more… And that’s because we recognize that these cost-of-living pressures do fall disproportionately on the lowest paid in our workplaces.”
Last July, the FWC hiked the minimum wage by 5.75% as costs of living surged, a decision some had feared would further stoke inflation. However, there has been no sign of a damaging wage-price spiral and inflation has slowed to two-year lows of 3.4% from a peak of 8.4%.
The Reserve Bank of Australia sees inflation edging down to 3.3% by June 2024.
The Labor government has also pledged more costs of living relief in the upcoming budget in May. It will deliver tax cuts for every taxpayer from July this year.
Earlier, Australia has announced that it will raise the minimum wage by 5.75% from July 1 as families grapple with soaring living costs, a decision that businesses and some economists say risks further stoking inflation and interest rates.
The independent Fair Work Commission (FWC) on Friday decided on a 5.75% pay rise for workers on awards with wages linked to movement in the minimum wage. It also made a technical reclassification for the national minimum wage, which the union says will take the increase to 8.6% for the lowest-paid employees, about 0.7% of the workforce.
In total, the determination from the FWC would affect wages for more than 2 million workers.
Su-Lin Ong, chief economist at RBC Capital Markets, said the hike could push wage growth above the 4% peak forecast by the Reserve Bank of Australia and require higher interest rates to combat inflation.
“Following several recent developments, including the outcome of today’s minimum wage decision, we are adding a 25bp hike to our RBA profile in June and another 25bp in July.” (Int’l Monitoring Desk)
