Australians are set for a pay increase after the Fair Work Commission confirmed it would increase the minimum wage.
The commission is raising the minimum wage by 5.2 per cent, with Australia’s lowest-paid workers set for a $40 a week pay raise from July 1.
The announcement signals the highest rise since 2006 and will see the national minimum wage set at $812.60 per week.
The government had initially recommended a 5.1 per cent increase, which is in line with the inflation rate, however, Fair Work Commission President Iain Ross explained how their annual wage review saw the need to exceed that amount.
Ross cited inflation pressures as the key to the decision in order to give a ‘greater level of support to the lowest paid’.
Ross said: “Headline inflation is now expected to peak at around 6 per cent in the second half of this year, partly driven by higher petrol prices and sharp increases in the cost of new dwellings.”
More than 2.7 million Aussies will benefit from the change.
It signals an election promise delivered by Anthony Albanese on his election campaign.
"We have a government that has low wage growth as a key feature of their economic architecture. They've said that," Albanese said in the lead-up to election day, as per the Daily Mail.
He added: “You should be able to pay your rent, to buy food, to get by, and the Fair Work Commission should bear that in mind in the decision that they make.
"Labor has a plan to lift wages and that is what we will do."
Delivering on a promise, what a loose unit.
Australian Council of Trade Unions Secretary, Sally McManus welcomed the increase.
"This decision is one that is reasonable and it is fair," she says.
"The union movement is happy and proud that we have fought for this increase and that it is going to make a big difference for so many workers."
However, Australian Chamber of Commerce and Industry Chief Executive, Andrew McKellar, was unhappy with the decision and believed it to be a ‘very significant risk to the economy’.
He said: “By our calculation, this will add $7.9 billion in costs to the affected businesses over the year ahead, so that will be a very considerable burden that those businesses will either have to take to the bottom line or pass onto their customers.
"It comes at a time when inflation is emerging as one of the most urgent challenges facing the Australian economy and if we are to address that, if we are to remain competitive, then, clearly, this is not a decision that will help in those circumstances."
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