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Friday, Jun 06, 2025
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Australia Implements 3.5% Wage Increase for Lowest-Paid Workers
The Fair Work Commission announces an increase affecting one in five workers, amidst various stakeholder reactions.
The Fair Work Commission (FWC) of Australia has announced a wage increase of 3.5% for the country's lowest-paid workers, effective from July 1. This decision will impact approximately one in five Australian workers who are on an award wage.
The panel of the commission reached this conclusion after reviewing submissions from various stakeholders, including government representatives, during their annual wage review process.
Fair Work Commission President Adam Hatcher indicated that those reliant on the award wages are predominantly women and tend to be employed in casual or part-time positions.
He expressed concern that neglecting this opportunity during the annual review could lead to a permanent decline in the real value of wages, which would subsequently entrench a reduction in living standards among the lowest-paid workers in the community.
As a result of the increase, the national minimum wage will rise from $24.10 to $24.94 per hour, equating to an increase from $915.90 to $947.95 per 38-hour workweek.
Union organizations have been advocating for a 4.5% increase in wages, arguing that a more significant rise is necessary to help low-paid workers recover against the backdrop of rising living costs.
In contrast, the Australian Chamber of Commerce and Industry proposed a more modest increase of no more than 2.5%, highlighting concerns that a larger wage raise could negatively impact small to medium-sized businesses.
Australian Council of Trade Unions (ACTU) National Secretary Sally McManus welcomed the decision, suggesting that the increase, which exceeds the current inflation rate, would assist lower-paid workers in managing essential expenses.
She emphasized the necessity of maintaining disposable income for workers, stating, "The very worst thing for small businesses is if workers' wages go backwards." McManus argued that reduced purchasing power would result in decreased spending on everyday items, further affecting small businesses.
Conversely, Luke Achterstraat, Chief Executive Officer of the Council of Small Business Organisations Australia, warned of the challenges that business owners would face due to the wage increase.
He commented that the decision to raise wages above inflation would pose additional financial burdens on businesses that are already struggling with slim profit margins.
Prime Minister Anthony Albanese assured the public that the wage increase would not lead to increased prices for consumers, indicating that the measure aims to prevent workers from falling behind in managing the cost of living.
Previously, in 2024, the FWC had approved a 3.75% increase in award wages, which was slightly lower than the annual inflation rate of 3.8%.
The panel of the commission reached this conclusion after reviewing submissions from various stakeholders, including government representatives, during their annual wage review process.
Fair Work Commission President Adam Hatcher indicated that those reliant on the award wages are predominantly women and tend to be employed in casual or part-time positions.
He expressed concern that neglecting this opportunity during the annual review could lead to a permanent decline in the real value of wages, which would subsequently entrench a reduction in living standards among the lowest-paid workers in the community.
As a result of the increase, the national minimum wage will rise from $24.10 to $24.94 per hour, equating to an increase from $915.90 to $947.95 per 38-hour workweek.
Union organizations have been advocating for a 4.5% increase in wages, arguing that a more significant rise is necessary to help low-paid workers recover against the backdrop of rising living costs.
In contrast, the Australian Chamber of Commerce and Industry proposed a more modest increase of no more than 2.5%, highlighting concerns that a larger wage raise could negatively impact small to medium-sized businesses.
Australian Council of Trade Unions (ACTU) National Secretary Sally McManus welcomed the decision, suggesting that the increase, which exceeds the current inflation rate, would assist lower-paid workers in managing essential expenses.
She emphasized the necessity of maintaining disposable income for workers, stating, "The very worst thing for small businesses is if workers' wages go backwards." McManus argued that reduced purchasing power would result in decreased spending on everyday items, further affecting small businesses.
Conversely, Luke Achterstraat, Chief Executive Officer of the Council of Small Business Organisations Australia, warned of the challenges that business owners would face due to the wage increase.
He commented that the decision to raise wages above inflation would pose additional financial burdens on businesses that are already struggling with slim profit margins.
Prime Minister Anthony Albanese assured the public that the wage increase would not lead to increased prices for consumers, indicating that the measure aims to prevent workers from falling behind in managing the cost of living.
Previously, in 2024, the FWC had approved a 3.75% increase in award wages, which was slightly lower than the annual inflation rate of 3.8%.