Business groups call for “modest” approach to minimum wage increase

Business and industry groups are urging Fair Work Australia to reject a claim for the minimum wage to be lifted by $26 a week, calling for a more “modest” approach to award wages.

The Australian Council of Trade Unions wants the minimum wage lifted by $26 a week – which would lift the minimum weekly wage to $615.30 – for the nation’s lowest paid workers.

Every financial year, Fair Work Australia’s Minimum Wage Panel conducts an annual wage review before issuing a decision and national minimum wage order.

The decision and order generally come into operation on July 1 of the following financial year. FWA’s 2011-2012 annual wage review is currently underway.

In its submissions to FWA, the ACTU said minimum award rates have been overtaken by inflation, and are now lower in real terms.

“This increase is necessary in order to maintain the relative living standards of low-paid workers and to help them meet their needs,” the ACTU stated.

“It is appropriate, responsible and justifiable in the macroeconomic conditions. We ask that the panel award it in full”.

But in hearings yesterday in Melbourne, the Australian Chamber of Commerce and Industry told the panel the ACTU’s wage claim should be rejected, calling for a “modest” approach to award wages.

According to ACCI, the ACTU claims would add $2.8 billion a year to the wages bill of award-regulated employers.

ACCI’s submission calls for a $9.40 increase in minimum award wages, with specific carve-out exclusions for sectors especially hit by current economic conditions.

Speaking prior to appearing in hearings, ACCI chief executive Peter Anderson said the union claims seek increases to “literally thousands” of award wage rates across multiple industries.

The employers in the firing line of the union claims are largely small and medium businesses in the slower lanes of the economy,” Anderson said.

“[These include] tourism, retail, clerical, manufacturing and hospitality employers impacted by the high dollar and the cautious consumer.”

According to Anderson, the Reserve Bank’s decision to slash interest rates earlier this month is the “clearest evidence possible” the RBA is concerned about the state of the economy.

“ACCI argues that these small and medium employers are entitled to a fair go of industrial justice,” he said.

Australian Industry Group chief executive Innes Willox has also urged the panel to take a cautious approach in adjusting minimum wages.

“The severity of conditions in trade-exposed non-mining industries… make these important, big-employing sectors very vulnerable to an excessive wage increase,” Willox said in a statement.

“The ACTU’s proposed increase… is economically unsustainable and would be damaging for the economy.”

“Ai Group has proposed firstly, that the federal minimum wage be increased by $14 per week operative from July 1, 2012, with the same increase applied to award minimum wages.”

“Secondly, if the tribunal decides to grant a percentage increase instead of a flat dollar increase, the $14 should be converted to a percentage of the base trade rate (i.e. 2%) and that percentage applied to all classifications.”