Via Fair Work:
Despite the recent fall in GDP growth, the Australian economy has performed moderately well and the relevant data are all indicative of a strong labour market. Although business conditions have declined from the high levels recorded in the first half of 2018, they remain consistent with trend growth in the economy and the labour market has performed strongly.
As the RBA has recently observed, ‘[a]lthough GDP growth has moderated, employment has continued to expand by enough to reduce spare capacity in the labour market over the past year’.
The Australian Government expects the economy to grow at its potential rate and to support future increases in employment.8 The proportion of the working-age population that is in employment is at record levels.
The prevailing economic circumstances provide an opportunity to improve the relative living standards of the low paid, and to enable them to better meet their needs, by awarding a real increase in the NMW and modern award minimum wages. No party identified any data which demonstrated adverse employment or other effects arising from the previous Review decisions, each of which resulted in real wage increases for NMW and award-reliant employees.
Our overall assessment is that the relative living standards of NMW and award-reliant employees have improved over recent years, although some low-paid award-reliant employee households have household disposable incomes less than the 60 per cent of the median income relative poverty line. A number of low-paid employee households are also likely to have disposable incomes that do not reach the threshold of the relevant Minimum Income for Healthy Living budget standard.
Women are disproportionately represented among those on the NMW and those who are reliant on modern award minimum wages. An increase in the NMW and modern award minimum wages will assist in reducing the gender pay gap. [10] We have decided to award a lower increase this year than that awarded last year having regard to the changes in the economic environment (in particular the recent fall in GDP growth and the drop in inflation) and the tax-transfer changes which have taken effect in the current Review period and which have provided a benefit to low-paid households.
We are satisfied that the level of increase we have decided upon will not lead to any adverse inflationary outcome and nor will it have any measurable negative impact on employment. However, such an increase will mean an improvement in real wages for those employees who are reliant on the NMW and modern award minimum wages and an improvement in their living standards.
We have determined that it is appropriate to increase the NMW by 3.0 per cent. The new NMW will be $740.80 per week, or $19.49 per hour. This amounts to an increase of $21.60 per week to the weekly rate.
We have also decided to increase all modern award minimum wages by 3.0 per cent. Weekly wages will be rounded to the nearest 10 cents. At the C10 tradesperson’s modern award minimum wage rate this translates to an increase of $25.10 per week.
We have taken into account the circumstances of different regions, industries and sectors but for the reasons set out in our decision, no exceptional circumstances have been demonstrated such as to warrant a deferral of the increases we have awarded.
They could have awarded a 10% rise and would not have put a dent in deflation.
