Australia's Peak Union Body Will Ask the Government For a 5% Pay Rise For Workers

Australia’s peak union body has announced it will seek a 5 per cent pay rise for all minimum and award wages as part of its submission to the Annual Wage Review.

The Australian Council of Trade Unions says inflation has “eaten away” at any award wage rises over the past three years, leaving people about $5,200 worse off, despite recent increases.

A 5 per cent increase would lift minimum wage to $24.39 per hour, up from $23.23, or $48,200 annually – an increase of $2,295.

Australia’s minimum and award wages are set by the Fair Work Commission, approved by the federal government, and every year they are reviewed. The Commission sees submissions from unions, employers and state and territory governments before it decides on what the next year’s wages should be.

About 2.9 million people, or one in four workers, are in jobs that pay award wages. The new rates will come into effect on July 1.

The ACTU will argue in its submission the modest rise will not result in higher inflation, as many business groups love to argue, because we saw inflation actually fall 3.7 per cent in 2023 after the Fair Work Commission ushered in the biggest increase to the minimum wage in 40 years of 8.6 per cent and 5.75 per cent for award wage workers.

The 8.6 per cent rise in 2023 translated to an increase of $1.85 an hour.

ACTU Secretary Sally McManus said on Tuesday a raise of 5 per cent would help people make up for lost income during a cost-of-living crisis and help boost the economy.

“The lowest paid workers are the ones who are the hardest hit by inflation, they need a 5% pay increase to start to get ahead again and make up for the real wage losses over the last few years,” she said in a statement.

The Australian Chamber of Commerce and Industry, the peak body which represents employers and business owners, has already announced it would call for an increase of no more than 2 per cent for both minimum and award wage workers because it said they were “over compensated” for inflation last year.

But the ACTU’s submission will assert that businesses won’t be impacted because Australia’s free market allows them to “adjust their prices to protect their margins, but workers pay does not move so easily”.

“This is why the annual wage review is so important, it is when the lowest paid workers have to chance to catch up, the result makes an enormous difference to millions of families,” McManus said.

McManus also said major companies’ record profits demonstrate that their margins are safe from minor worker pay increases.

“A 5 per cent pay increase is fair and reasonable,” she said.

“For some perspective, the CBA posted a $10 billion in profit last financial year. It could pay for the entire union wage claim for 2.9 million workers of 5% and still be one of the most profitable businesses in the country.”

Australia’s rate of inflation as of the end of February is 4.1 per cent, down from a peak of around 8 per cent in December 2022 but still above the Reserve Bank of Australia’s 2-3 per cent target range.

And after years of rising costs for housing, food, petrol and other essentials since the pandemic, workers – especially young workers – are still struggling to make up their losses.

Aleksandra Bliszczyk is the Deputy Editor of VICE Australia. Follow her on Instagram.

Get the story that matters most each day. Subscribe to Australia Today’s daily newsletter here.