Pay rise on the way for millions of Aussies – what you need to know

Anthony Albanese‘s government is backing a pay rise for three million low-paid workers including retail staff, early childhood educators and cleaners as part of its election pitch.

Labor will make the submission to the Fair Work Commission – Australia’s independent tribunal responsible for setting award rates and minimum wage – on Wednesday. 

The submission urges the independent body to provide ‘an economically sustainable real wage increase’ to Australians on award and minimum wages. 

The submission does not stipulate a set dollar or percentage increase, but is advocating a increase in ‘real’ wages- a percentage rise above the inflation rate – whereas Labor’s  previous submissions only argued for real wages not to go backwards.

The Budget forecast a 2.5 per cent inflation rate this year and 3.0 per cent next year, so Labor is pushing for wage rises above that level.

Labor denies the pay rises will trigger more inflation, even though Reserve Bank governor Michelle Bullock warned this week that wage inflation loomed as a factor preventing any more interest rate cuts. 

‘Inflation has come down substantially and is on track to return sustainably to the RBA’s target band this year,’ Labor wrote in its submission. 

‘An increase in minimum and award wages should be consistent with this. Labor submits that this outcome is both fair and economically responsible.

Prime Minister Anthony Albanese’s Labor party will make a submission to the Fair Work Commission for an increase to award rates and minimum wages on Wednesday

‘Labor believes workers should get ahead with a real wage increase. Despite heightened global uncertainty and volatility, the Australian economy has turned a corner.

‘Inflation is now less than one third of its peak, unemployment remains low, there are over a million additional people employed than in May 2022, and interest rates have started to come down. 

‘Economic growth rebounded at the end of last year and the private sector is now a key contributor to growth. Importantly, real wages growth has now returned and is forecast to continue across 2024-25 and 2025-26.

‘A soft landing in our economy looks more and more likely. While the global economy is uncertain and Australians are still under pressure, Labor has made substantial progress in turning the economy around.’ 

The submission adds the Albanese Government is ‘focused on finishing the fight against inflation’ and is determined to build a stronger budget and economy while also delivering responsible cost of living relief. 

About 2.9million Australian workers are paid based on the award, with the national minimum hourly wage of $24.10.

‘Low paid workers and their families are particularly affected by cost of living pressures,’ the submission reads.

‘They typically have limited liquid asset buffers to draw on to cover rising costs and they are less able to deal with unexpected expenses.

The submission calls for a ‘real wage increase’ on award and minimum wage, which will affect about three million Aussies including cleaners, retail staff and early childcare educators 

‘Around 20 per cent of the lowest paid employees provide for financially dependent children and nearly 40 per cent have a mortgage.’

Mr Albanese was using the election campaign to try to counter voter focus on cost-of-living increases under his government and was burnishing its economic credentials.  

‘During the last campaign, as I travelled around the country, I was asked if I supported a wage increase for low paid workers. I said absolutely,’ Mr Albanese said.

‘The Liberal Party said this would wreck the economy. Since then, we’ve seen wages going up, inflation coming down and interest rates starting to fall. 

‘This campaign we will again be advocating for workers to get a pay rise to not only help them deal with the pressures of today, but to get ahead in the future.’

The policy is not a binding commitment, which means pay rises are not guaranteed if Mr Albanese wins the next federal election and retains power.