AAA: Minimum wage hike increases strain on SMEs

The Fair Work Commission has awarded a 2.5 per cent wage rise for 1.86 million lowest-paid workers with the minimum wage going up by $16 a week.

Fair Work Commission president, justice Iain Ross, said, “The lower inflation and aggregate wages growth has favoured a more modest increase in minimum wages.”

The weekly minimum wage will rise to $656.90 from July 1. The increase is well below the $27 a week rise the ACTU wanted.

The Australian Chamber of Commerce and Industry said the awarded rise sits above the rate of inflation.

“We hold concerns that this increase is too high against the backdrop of softening labour market conditions and an economy undergoing structural adjustment,” ACCI director of employment, education and training Jenny Lambert said.

ACTU secretary Dave Oliver said despite the lift in the weekly minimum wage to $656.90, it will be just 43.3 per cent of average weekly ordinary time earnings, the lowest proportion on record.

ACTU secretary Dave Oliver said the union body’s desired $27 a week increase would have minimised the gap between average weekly earnings and the minimum wage. “This decision has set us back even further because every year we are playing catch up and now next year we’re going to have to play more catch up than we have done in previous years.”

The Accommodation Association of Australia believes the 2.5 per cent wage increase may place further strain on many accommodation businesses, particularly on smaller businesses which are already experiencing difficult trading conditions. The increase will have a multiplier effect on penalty rates, which already is a disincentive to employ more staff when those penalties apply.

“The accommodation sector has been beset by increases from a number of sources over recent months and this increase will only serve to further strain an already challenging business environment particularly for SMEs and regional operators”, said AAA, CEO, Richard Munro.

Award employees in all award classifications will receive an increase of 2.5 per cent. Wages for junior employees and for trainees and apprentices will also increase.


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