Nearly 3 million workers will get a pay rise from 1 July after the Fair Work Commission lifted the annual minimum wage by 4.75% and gave about 100,000 of the country’s lowest paid employees a larger 6% increase. The lowest ongoing wage rate will rise from nearly $24.95 an hour to $26.44.
Justice Adam Hatcher said the decision was particularly challenging, pointing to surging fuel prices and existing inflationary pressure. He said falling living standards had hit the lowest paid hardest, and that additional measures were justified to protect more vulnerable employees.
The ruling landed on Tuesday morning, which is why workers, employers and unions were watching it closely. It applies to roughly 2.8 million people on award wages and answers the immediate question of what will change in pay packets once the new rates take effect on 1 July.
The size of the increase sits between the demands from labor and business. Unions had pushed for a 6% minimum wage rise after last month’s budget projected inflation at 5% in the year to June, while the Australian Chamber of Commerce and Industry argued for only 3.5%.
Hatcher said the higher increase for the lowest paid reflected a structural adjustment to pay classifications, not a blanket move for all workers. That means the biggest lift goes to the people at the bottom of the pay scale, while the broader workforce gets the smaller 4.75% rise that starts next month.
The decision comes after inflation ran at 4.2% in the year to April and after the budget warned consumer price growth could go beyond 5% if the Middle East conflict drags on and oil prices keep climbing. Jim Chalmers has called for a real wage increase that is also sustainable, and this ruling is the commission’s answer to that balance.
