Fair Work has delivered low-paid Australians a large pay cut:
[1] We are announcing today the decision we have reached in this year’s Annual Wage Review.
[2] The Annual Wage Review is conducted in accordance with s 285 of the Fair Work Act, which requires the Fair Work Commission to undertake two tasks.
[3] The first task is to review, and make, the National Minimum Wage order. The National Minimum Wage sets a minimum rate of pay for employees in the national industrial relations system who are not covered by a modern award or an enterprise agreement. It does not set a floor for minimum wage rates in modern awards. Only a small number of employees, about 0.7 per cent of Australian employees are paid the National Minimum Wage.
[4] The second task is to review modern award minimum wages. There are 121 modern awards which apply to employees in the national industrial relations system in various industries and occupations. There are also a small number of modern enterprise awards which apply to specific business enterprises. Each modern award sets minimum wage rates for employees working in the industry, occupations or enterprises covered by the award. In setting award rates of pay, the Commission is required to take into account the amount of the National Minimum Wage.
[5] Approximately 20.5 per cent of Australian employees are paid in accordance with minimum wage rates in modern awards.
[6] There are some additional categories of employees who are also affected by the Review in a less direct way by Review outcomes being ‘flowed on’ by various means. However, these categories of employees are small in number. Our decision in this Annual Wage Review will therefore operate upon the wages of about a quarter of Australian employees.
[8] The broader economic effect of Annual Wage Review decisions is limited. The total wages cost of the modern award-reliant workforce constitutes about 11 per cent of the national ‘wage bill’. Wage increases awarded in last year’s Annual Wage Review decision directly contributed less than 10 per cent of the total wages growth in 2022. Furthermore, most of the modern award-reliant workforce is employed under a relatively small number of modern awards covering specific industries or occupations. This means the effect of the Review decision differs markedly as between industry sectors.
[17] The most important aspect of our decision concerns the adjustment to minimum wage rates in modern awards. We have decided that award rates of pay will be increased by 5.75 per cent effective from 1 July 2023.
[18] As the total wages of modern award-reliant workers constitute a limited proportion of the national wage bill, we are confident that the increase we have determined will make only a modest contribution to total wages growth in 2023-24 and will consequently not cause or contribute to any wage-price spiral.
[19] We acknowledge that this increase will not maintain the real value of modern award minimum wages nor reverse the reduction in real value which has occurred over recent years.
5.75% is -0.65% based upon the last monthly inflation number and much worse on peak inflation numbers.
