Australian employers, employees and job-seekers need to be assured that the Fair Work umpire would remain truly independent in setting minimum wages if Labor wins government, the Australian Chamber of Commerce and Industry, Australia’s largest network of businesses said today.
“For more than a century, minimum wages have been set by an independent body – not the Government, nor Parliament,” Australian Chamber CEO, James Pearson, said.
“Recent comments by the Opposition, predicting the Fair Work Commission would ‘share the priorities’ of an incoming Labor government need to be clarified.
“Wage decisions must be made on their independent merits, and not allow for political influence.”
Mr Pearson highlighted the need for the Fair Work Commission to continue to independently balance the evidence on factors such as:
– The needs of low paid employees
– The overarching economy
– Not increasing unemployment
– The importance of keeping small businesses in business.
“Manipulating these factors could lead to bad outcomes,” Mr Pearson said.
“It could see one person’s pay-rise cost another person their job.
“If Labor seeks to influence Fair Work Commission decisions, they should explain what they believe Commission is doing wrong.
With the Fair Work Commission awarding minimum wage increases of 3.5% in 2018, and 3.3% in 2017 – well in excess of inflation and wage growth across the wider community – it’s hard to see how that is letting down lower paid employees.
Mr Pearson called on Labor to:
This week’s discussion on minimum wages, has revealed substantial misunderstandings about the role of the Fair Work Commission and how it sets minimum wages. The fact sheet below sets the facts straight.
– For more than a century, minimum wages in Australia have been set by an independent body, not the Government, or Parliament. Just as interest rates are set by the independent Reserve Bank – this ensures minimum wage setting is non-political and balances all competing interests.
– The Fair Work Commission does not set all wage rates across the Australian economy. It sets a National Minimum Wage and around 2,000 other, higher minimum wages that are reviewed and increased annually and apply in total to 23% of working Australians.
– The last minimum wage increase was on 1 July 2018, minimum wages increased by 3.5 percent (inflation for the same period was only 1.9%).
National Minimum Wage v Inflation
– Minimum wages are already growing by significantly more than prices, which means they are increasing purchasing power and living standards.
– The average minimum wage increase over the current business cycle (from 2011-2012) has been 2.9%, inflation for the same period has averaged just 1.9%.
– Minimum wages are increasing faster than living costs. Since 2011-2012 minimum wage increases have exceeded inflation by more than 1% each year.
– Australia’s has the second highest minimum wage in the world, behind only Luxembourg.
Needs of the Low Paid
– Under the Fair Work Act, the Fair Work Commission already looks extensively at the needs of the low paid as a part of a range of factors it must consider in deciding on wage increases.
– The Fair Work Commission regularly conducts research into the needs of the low paid to inform its Annual Wage Review decisions. Last year this included a paper on ‘Characteristics of workers earning national minimum wage rate and of the low paid’.
– Setting an arbitrary target or forcing the Fair Work Commission to give greater weight to some factors over others would destroy its independence and would not allow it to take into account all of the relevant factors that it does now including the impact on job creation, the effect on the viability of employers, and the state of the economy.
– In its 2016-2017 Annual Wage review decision, the Fair Work Commission explicitly ruled out the ACTU Living Wage proposal stating “we do not find this to be a helpful characterisation, since there is nothing particularly analytical about having a number to aim at”.
– The Fair Work Commission has found that the characteristics of workers earning the National Minimum Wage rate and of the low paid typically are female, employed on a casual basis, working part-time, award reliant and aged between 15 and 20 years.
– Over two-thirds of low-paid workers leave low-paid work within a year. When they move into a higher-paid job they can expect a 58 percent wage increase on average.
 Australian Government Submission to the Annual Wage Review 2018.
 Australian Government Submission to the Annual Wage Review 2018.
 Annual Wage Review Decision 2018, para 150.
 Gap between CPI and nominal minimum wage increases from 2010 to 2018 is 1.011%
The Australian Chamber is delighted to announce Bryan Clark, Director of ACCI Trade & International Affairs, has been appointed to the Government’s Deregulation Taskforce, announced...
Australian Chamber – Tourism, the national peak body of Australian tourism organisations congratulates Prime Minister...
The new Morrison Coalition Federal Government Ministry reflects the right mix of stability and progress for the Australian business community, Australia’s largest business network, the...
Australia’s largest business network, the Australian Chamber of Commerce and Industry, congratulates Prime Minister Morrison and the Federal Coalition on its re-election to government. “The...
The Australian Chamber of Commerce and Industry, Australia’s largest and most representative business network, today paid tribute to the life and achievements of The Hon...
The Australian Chamber – Tourism, the national peak body of Australian tourism organisations supports Labor's Tourism Policy announced yesterday evening. The policy responds directly to a number...
Australia’s largest and most representative business network, the Australian Chamber of Commerce and Industry, will today call on the Fair Work Commission to deliver a...
Australia’s largest and most representative business network, the Australian Chamber of Commerce and Industry, welcomes Labor’s commitment to deliver surpluses and pay down debt in...
The Coalition’s commitment to reduce power prices through increased supply and competition is a positive response to calls by the Australian Chamber of Commerce and...
Australia’s largest network of businesses, the Australian Chamber of Commerce and Industry, welcomes Labor’s pledge today to boost the Research and Development (R&D) tax incentive...
Australian Chamber – Tourism, the peak body representing national tourism groups acknowledges the formal announcement of the Coalition’s tourism policy, which commits to the Beyond...
The Tourism Satellite Accounts for 2017-18 highlight the visitor economy as one of Australia’s strongest performers, defying the downward trend of many other parts of...
Comments by Shadow Workplace Relations Minister Brendan O’Connor that Labor has “no plans” to subsidise pay rises for sectors beyond child care are welcomed by...
Australian Chamber - Tourism, the peak body representing the national tourism groups, welcomes Labor’s Tourism policy platform, which commits continued infrastructure, regional aviation, and Tourism...
Labor’s announced changes to temporary skilled visas will impose big cost increases on small businesses who need to fill skill shortages through temporary skilled migration, particularly...
“The Prime Minister’s announcement today confirming the detail of the Australian Business Growth Fund, is further welcome recognition of the role small business plays in...
Australia’s largest and most representative business voice, the Australian Chamber of Commerce and Industry, is calling on the Australian Council of Trade Unions (ACTU) to stop...
One of the most important election campaigns in a generation has begun. The policies of whoever wins will have a profound impact on businesses. That...
A commitment from a future Labor government to deliver surplus budgets against the risk of future global shocks is welcomed by the Australian Chamber of...
“Hundreds of thousands of Australian small businesses have been left in limbo, not knowing whether or not they will be subject to billions of dollars...