Prime Minister Anthony Albanese has told his cabinet that increasing the minimum wage will be one of his first election priorities despite the added financial pressure that will put on already struggling businesses.
The prime minister unveiled his new front bench on Monday following Labor’s landslide win at the May 3 election, with their first cabinet meeting held on Tuesday.
‘Labor will always stand for improving people’s wages and conditions,’ Mr Albanese said.
‘And we know that part of our agenda in dealing with cost-of-living pressures isn’t just getting inflation down – it’s getting wages up and maintaining strong employment.
‘We think that people on the minimum wage deserve a wage increase.’
Before the election, Mr Albanese urged the Fair Work Commission to increase the minimum wage to at least match inflation, which was at 2.4 per cent on March quarter figures.
‘The idea that a Labor government would ever advocate for a below-inflation increase, that people on the minimum wage should go backwards – that’s not the party I belong to and not the party I lead,’ Mr Albanese said at the time.
But unlike in the previous election when he backed a 5.1 per cent increase to match inflation, this time Mr Albanese refused to nominate a specific figure.
‘We recommend that the FWC should go further and provide an economically sustainable real wage increase to Australia’s award workers,’ he said.
‘An increase in minimum and award wages should be consistent with inflation returning sustainably to the RBA’s target band this year, while providing further relief to lower income workers who continue to face cost of living pressures.’
Millions of Australians could soon receive a pay rise after Prime Minister Anthony Albanese’s historic election victory
Before the election, Albanese pushed for a minimum wage increase to at least match inflation – currently at 2.4 per cent
Australia’s national minimum wage is $24.10 per hour, equating to $915.90 for a 38-hour week, or $47,626.80 annually. Casual workers receive a 25 per cent loading, taking their hourly pay to approximately $30.13.
Casual employees receive an additional 25 per cent loading, bringing their hourly rate to approximately $30.13.
If the Fair Work Commission approves a 2.4 per cent increase, the minimum wage would rise by 58 cents per hour to $24.68 – or an extra $21.98 per week.
The Commission conducts its Annual Wage Review between March and June, with any changes typically taking effect from July 1.
A minimum wage rise will benefit the estimated 180,000 workers currently on the minimum wage, as well as 2.6 million workers across 121 awards that will also be adjusted.
Since Mr Albanese became Prime Minister in May 2022, the national minimum wage in Australia has increased by 8.5 per cent.
This includes a 5.2 per cent rise in July 2022 and a 3.75 per centincrease in July 2024
In a separate decision announced in March, the Albanese government revealed it will lift the award rate for aged care workers.
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Registered and enrolled nurses will see an average 12 per cent increase in their award wage. The increases will be delivered in three installments: 1 March 2025, 1 October 2025, and 1 August 2026.
Small business failures reached a 15-year high during the Albanese government’s first term, and a further increase in wage demands will put further pressure on the struggling sector.
‘This wage increase will only amplify the extreme cost-of-doing business challenges being felt by retail businesses, and many may be forced to reconsider hours of trade, reduce labour, or worse close up shop,’ National Retail Association chief executive Lindsay Carroll said after last year’s minimum wage rise.
‘Our recent retail sentiment report shows 84 per cent of Australian businesses expect profitability to be significantly worse over the next year, and the Commission’s decision is sure to exacerbate this expectation.’
Mr Albanese also revealed that one of his first priorities would be to implement his plan to cut all student loan debts by 20 per cent, wiping out around $16billion for approximately three million Australians.
The policy – central to Mr Albanese’s re-election campaign – is now set to be implemented following his election victory as of June this year.
Under the plan, a graduate with an average student debt of $27,600 will see their loan reduced by $5,520, according to government figures.
Mr Albanese’s proposed reform would apply to all Higher Education Loan Program, Vet Student Loans, Australian Apprenticeship Support Loans and other income-contingent student loans.
The reforms would also raise the threshold for repayment from $54,000 to $67,000 and lower the rate to be repaid.
For someone on an income of $70,000, this will mean they will pay around $1,300 less per year in repayments.
