Here’s what you need to know about the new minimum wage


The increase in the new Australian minimum wage is set to take effect 1 July. But not everyone is happy about it. Here’s what you need to know.

The 1.8 million Aussies who work for minimum wage will see a salary lift to the tune of 2.4 per cent, or an extra $800 a year. 

This increase means the national minimum wage will become $17.70 an hour, which brings the total to $672.70 a week. Every year, the Fair Work Commission (FWC) adjusts the national minimum wage in response to factors such as inflation, wage growth and shifting labour markets.

“The level of increase will not lead to inflationary pressure and is highly unlikely to have any negative impact on employment,” says Iain Ross, the Commission’s president. He says that the current economic climate in Australia is robust enough to support an increase greater than the rate of inflation, which is currently 1.3 per cent. “The prevailing economic circumstances provide an opportunity to improve the relative living standards of the low paid.”

Although this increase is .1 per cent lower than last year’s, on the whole it appears that no one is really happy with it – some say it goes too far, others say not enough.

The Australian Council of Trade Unions (ACTU) had pushed for a $30-a-week increase, while many business groups, including the Australian Chamber of Commerce and Industry (ACCI), lobbied for a more modest $7.90- to $10.50-a-week pay rise.

“Consistently granting increases above the wage rises received by other workers is inconsistent with the role of minimum and award wages as a safety net,” says James Pearson, CEO of the ACCI.

The Australian Industry Group (AI) echoed these thoughts, and called the raise a “major impost” on business at a time when the economic environment was difficult, risky and uncertain. “With jobs growth slowing and unemployment remaining at unsatisfactory levels, a more modest wage increase would have reduced the risks of adverse employment outcomes,” says AI CEO Innes Willox.

The response from unions has also been negative. Ged Kearney, secretary of the ACTU, says that the raise is headed in the right direction, but it falls short of expectations. “We are disappointed in the missed opportunity to truly narrow the gap between the minimum wage and average earnings – now would have been the ideal time to lift the minimum wage,” agrees ACTU Secretary Dave Oliver.

In the past, Prime Minister Malcolm Turnbull has praised the value of fairness as critical to growth and success. Speaking at the Economic and Social Outlook Conference in Melbourne in 2015, he stated that the government’s overall goal is a “high wage” economy characteristic of a first-world country. The new increase brings the Australian minimum wage well above the hourly rate in countries such as the US (AUD$10.08), the UK (AUD$14.66), New Zealand (AUD$14.22) and China (AUD$1.68-$3.93).

All of this comes at a time when new figures from the Australian Bureau of Statistics (ABS) show that the country has seen the fastest growth in quarter GDP since 2012. In the first quarter of 2016, the per cent of growth was 1.1 compared to 3.1 per cent growth in the second quarter. Much of this boom is from an increase in exports. However, this rise is tempered by declining purchasing power by Australian households – disposable income has decreased steadily since September 2011.

What do you think about the increase in the minimum wage? Will it affect your business in any way? Let us know in the comments. 

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Here’s what you need to know about the new minimum wage


The increase in the new Australian minimum wage is set to take effect 1 July. But not everyone is happy about it. Here’s what you need to know.

The 1.8 million Aussies who work for minimum wage will see a salary lift to the tune of 2.4 per cent, or an extra $800 a year. 

This increase means the national minimum wage will become $17.70 an hour, which brings the total to $672.70 a week. Every year, the Fair Work Commission (FWC) adjusts the national minimum wage in response to factors such as inflation, wage growth and shifting labour markets.

“The level of increase will not lead to inflationary pressure and is highly unlikely to have any negative impact on employment,” says Iain Ross, the Commission’s president. He says that the current economic climate in Australia is robust enough to support an increase greater than the rate of inflation, which is currently 1.3 per cent. “The prevailing economic circumstances provide an opportunity to improve the relative living standards of the low paid.”

Although this increase is .1 per cent lower than last year’s, on the whole it appears that no one is really happy with it – some say it goes too far, others say not enough.

The Australian Council of Trade Unions (ACTU) had pushed for a $30-a-week increase, while many business groups, including the Australian Chamber of Commerce and Industry (ACCI), lobbied for a more modest $7.90- to $10.50-a-week pay rise.

“Consistently granting increases above the wage rises received by other workers is inconsistent with the role of minimum and award wages as a safety net,” says James Pearson, CEO of the ACCI.

The Australian Industry Group (AI) echoed these thoughts, and called the raise a “major impost” on business at a time when the economic environment was difficult, risky and uncertain. “With jobs growth slowing and unemployment remaining at unsatisfactory levels, a more modest wage increase would have reduced the risks of adverse employment outcomes,” says AI CEO Innes Willox.

The response from unions has also been negative. Ged Kearney, secretary of the ACTU, says that the raise is headed in the right direction, but it falls short of expectations. “We are disappointed in the missed opportunity to truly narrow the gap between the minimum wage and average earnings – now would have been the ideal time to lift the minimum wage,” agrees ACTU Secretary Dave Oliver.

In the past, Prime Minister Malcolm Turnbull has praised the value of fairness as critical to growth and success. Speaking at the Economic and Social Outlook Conference in Melbourne in 2015, he stated that the government’s overall goal is a “high wage” economy characteristic of a first-world country. The new increase brings the Australian minimum wage well above the hourly rate in countries such as the US (AUD$10.08), the UK (AUD$14.66), New Zealand (AUD$14.22) and China (AUD$1.68-$3.93).

All of this comes at a time when new figures from the Australian Bureau of Statistics (ABS) show that the country has seen the fastest growth in quarter GDP since 2012. In the first quarter of 2016, the per cent of growth was 1.1 compared to 3.1 per cent growth in the second quarter. Much of this boom is from an increase in exports. However, this rise is tempered by declining purchasing power by Australian households – disposable income has decreased steadily since September 2011.

What do you think about the increase in the minimum wage? Will it affect your business in any way? Let us know in the comments. 

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