Labor call for living wage sends a shiver down the spine of small business

06 Mar 2019 |

“The Opposition Leader’s reported call to move from a minimum wage to a so-called “living wage” – a proposal pushed by ACTU boss Sally McManus – could cost our economy more than $8.7 billion per year, and has sent a shiver down the spine of small businesses throughout Australia,” Australian Chamber of Commerce and Industry CEO, James Pearson, said today.

Responding to reported calls by Bill Shorten to move from the current minimum wage to a “living wage”, Mr Pearson said his reported remarks “will dismay the hundreds of thousands of small and family businesses who depend on the current independent minimum and award wage setting process to set the wages they pay.”

“Labor’s position seems entirely focussed on pushing up wages, without any regard for the capacity of businesses, particularly small businesses, to afford to pay, and without regard to the impact on jobs and hours. It will send a shiver down the spines of small business people throughout Australia.

“Businesses, especially small businesses are already struggling to keep people in work. They would be hit with massive additional increases in the costs of employment.

“If Australia moves to massively increase minimum wages, jobs will be lost, hours cut, and businesses will go out of business – the basic economics of employing and staying in business will change for small businesses across the country – there is nothing surer.

“Labor needs to clarify, urgently, exactly what it intends, how it would change the rules for minimum wage setting, and how much it wants to increase minimum wages.

Mr Pearson added:

  • “Australia already has the second highest minimum wage in the world, behind only Luxembourg. In mid-2018 it was briefly the highest.
  • The minimum wage of $18.93 per hour applies to just 200,000 working Australians / 1.9%.
  • Such an increase would also flow to the 2.3 million Australians who work on higher award minimum wages.
  • Entry level rates for many industries are in practice already higher than the minimum wage. The price of creating a job in a shop ($789.90), or as a cleaner a ($768.10) are well above the minimum wage.
  • The current minimum wage is more than keeping pace with prices.
  • Minimum wages have gone up by more than inflation for 9 years straight. Last year’s minimum wage increase of 3.5% was more than 75% higher than inflation.
  • Our minimum wages are set by a panel of people Mr Shorten appointed as Minister under rules Labor put in place in government.”

The Australian Chamber speaks for over 300,000 businesses employing millions of Australians in every sector of our economy and in every part of our country.

Emily Kennelly

Adviser - Public Affairs & Advocacy

P  |  0438 730 772

E  |  [email protected]

Want to hear more from us?

NewsletterMedia Releases