Minimum wage: ACTU pushing for $45-a-week increase, employers want lower pay rise
ABC News
Updated 30 Mar 2017
Another battle is brewing in the increasing hostile relationship between the nation's peak trade union and employer bodies.
Key points:
ACTU seeks a 6.7pc wage increase
Ai Group asks for 1.5pc increase, retailers call for 1.2pc
Last year's minimum wage increase was 2.4pc
The Australian Industry Group (Ai Group) is recommending that the Fair Work Commission adopt a cautious approach when determining the level of any rise in minimum wage, at the same time the unions are pushing for a much more substantial increase.
Sally McManus, the new secretary of the Australian Council of Trade Unions (ACTU), said she would submit a claim to lift the minimum wage by $45 a week, almost tripling last year's increase of just over $15 a week.
"This will bring the minimum wage closer to what the OECD says is needed to avoid low-paid work, 60 per cent of the average [wage]," Ms McManus said in an address to the National Press Club on Wednesday.
"Remember this is still only $37,420 a year, or $18.89 an hour. The minimum wage is just one example where working people have been left behind by a system of rules which have simply failed to keep pace."
In its submission to this year's Annual Wage Review, the Ai Group will recommend a 1.5 per cent increase in minimum wages, which it argues is enough to sustain household purchasing power while not bankrupting businesses.
This is a rise of about $10 per week for a full-time worker, or less than a quarter of unions are seeking.
The Ai Group's head of policy, Peter Burn, said a higher wage increase runs the risk of decreasing the number of people in work and reducing the amount of hours offered by employers.
He said this will consequently lead to a reduction in household spending.
"We're squeezed here between our desire to give everyone a big increase [in wages], and of course that's got some appeal," he told the ABC.
"But the reality is, is that the impact that would have is very likely to worsen household spending, household income."
Mr Burn said the rate Ai Group is proposing will have a greater impact on increasing employment than the ACTU's proposal.
"We're suggesting that we're more likely to see an increase in hours worked and an increase in employment if you go for our increase then if you go for say an increase in the order of magnitude that the ACTU is proposing."
Retailers call for smaller 1.2pc increase
Even the Ai Group's proposal is higher than the Australian Retailers Association's recommendation, which is for an increase of just 1.2 per cent, much less than the rate of inflation and a cut in real wages for workers.
Wage cut could backfire
Businesses are hoping to profit from the Sunday penalty rate cut, but their workers are also ultimately their customers.
The retail lobby group's recommendation comes despite the Fair Work Commission's ruling in February that Sunday wages would be reduced from 200 per cent of the standard rate to 150 per cent for full-time and part-time staff in retail.
Despite the reduction in penalty rate costs, the ARA's executive director Russell Zimmerman said retailers are facing a difficult operating environment.
"The uncertainty in the retail sector is very predominant in our mind," he said.
"We know that retailers are doing it tough, we know that many retailers are seeing very little growth and so hence the reason why we have come back and said only a 1.2 per cent increase."
Mr Zimmerman said members have experienced significant cost pressures through international competition and reduced margins.
"Therefore we strongly recommend this wage increase remains realistic and reasonable for all businesses operating in the retail sector," he added.
When asked about Labor's position on the matter, Opposition Leader Bill Shorten said the party had not settled on a number yet, but he agreed with the proposition that Australians are doing it tough.
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