Government's Annual Wage Review Submission

Media release
03 Jun 2022
Prime Minister, Treasurer, Minister for Employment and Workplace Relations, Minister for the Arts

Today the Albanese Labor Government has recommended to the Fair Work Commission’s Expert Panel conducting the Annual Wage Review that they ensure that the real wages of Australia's low paid workers do not go backwards.

One of our election commitments was to put forward our own submission to the Fair Work Commission advocating for an immediate wage increase for Australia’s low-paid workers, and today we are delivering on that promise.

For nearly a decade, low wages were a deliberate design feature of the Liberal National Government.

That era is now over.

Economic conditions are highly unusual and challenging given inflation is at a 21-year high of 5.1 per cent and is expected to increase further in the near-term due to persistent and compounding supply shocks.

High and rising inflation and weak wages growth are reducing real wages across the economy and creating cost-of-living pressures for Australia’s low-paid workers.

The Government does not want to see Australian workers go backwards; in particular, those workers on low rates of pay who are experiencing the worst impacts of inflation and have the least capacity to draw on savings.

Many low-paid workers are young, female, in casual employment, and are far more likely to find themselves experiencing financial hardship.

These low-paid workers were also on the front line delivering essential services during the COVID-19 pandemic, including in the retail, hospitality, aged care, cleaning, and childcare sectors.

Over the past decade, in 9 out of 10 years, the Panel has increased the minimum wage rate in line with, or above, inflation. The largest increase in recent years was in 2018–19 where a 3.5 per cent increase was ordered, when inflation was only 1.9 per cent.

Our submission does not suggest that across-the-board, wages should automatically increase in line with inflation, and our broader economic plan has been calibrated to boost productivity, which is the key driver of real wages growth over the longer term.

Ensuring that real wages for low-paid workers do not go backwards will protect the relative living standards for these workers and give them the best chance possible to earn a decent living, keep up with skyrocketing costs of living, secure more opportunities and actually get ahead.

An increase in wages for Australia’s low-paid workers will also complement our efforts to help close the national gender pay gap.

The economy we inherited from the previous government is weaker than was expected before the election and there are significant challenges ahead.

The Albanese Labor Government has immediately started work on building a better future for all Australians, including through this Annual Wage Review submission.

We thank the Fair Work Commission’s Expert Panel conducting the review for the opportunity to make a submission and look forward to their decision later this month.

Attachment

New Australian Government Submission to the Fair Work Commission Annual Wage Review 2022 PDF 598 KB | DOCX 147 KB