IN WHAT unions fear could be the last safety net review of its kind, the ACTU recently puts its minimum wage case to the Australian Industrial Relations Commission (AIRC) for a $26.60 a week pay rise for 1.6 million low paid Australians
IN WHAT unions fear could be the last safety net review of its kind, the ACTU recently puts its minimum wage case to the Australian Industrial Relations Commission (AIRC) for a $26.60 a week pay rise for 1.6 million low paid Australians.
If successful, the claim would see an increase in the minimum wage from $467.40 to $494 per week (from $12.30 per hour to $13 per hour).
The ACTU fears that the Federal Government will abolish the system of minimum award wages and conditions that have “underpinned the job security and living standards of working Australians for 100 years”, according to ACTU secretary Greg Combet.
“Abolishing or nobbling the independent role of the Australian Industrial Relations Commission in setting minimum award wages would be a disaster for the living standards of low-paid workers and their families,” he said.
“We don’t want a US style system in Australia where large numbers of working people are forced to live in poverty. Minimum wages in the US are just $5.15 an hour and have been increased only once (by 40 cents) since 1996.”
While the ACTU argued that its claim was moderate and economically responsible, employer groups said it ignored the effect it would have on the job prospects of the unemployed.
“The ACTU claim will increase pressure on interest rates and fails to take into account the very large recent increases in Government family assistance payments,” said Heather Ridout, chief executive of The Australian Industry Group.
She said paying the $26.60 would cost employers about $35 after on-costs are included, such as payroll, workers comp, superannuation guarantee charge and proportional loadings.
“For a single person on minimum wages, for example, the cash in hand benefit would be about $18.00. This is about two thirds of the asked for increase and only half of the cost paid by employers.”
The Australian Chamber of Commerce and Industry (ACCI) said that the ACTU claim would make it more difficult to move lower skilled persons from welfare to work.
“High minimum wages make it harder for people to move from welfare to work, particularly if they are lower skilled,” said ACCI chief executive Peter Hendy.
“The minimum wage increase will hit small and medium businesses the hardest, with many larger businesses subject to agreements not awards. Most wage increases are paid by increasing the bank overdraft.”
Since 1996, the Federal Government has opposed every increase in minimum wages sought by the ACTU, instead offering between $8 and $12 a week.
“The ACTU’s claim will also be inflationary because any increases in the minimum wage will flow right through the award system to a significant number of higher paid workers, regardless of their productivity levels,” said Minister for Employment and Workplace Relations Kevin Andrews.
The Business Council of Australia recently highlighted the unintended consequences of trying to use the workplace relations and award system to achieve ‘fairness’ for workers, he said.
“It often has the opposite result, leading to the creation of fewer jobs and unemployment being higher than it should be.”
However, the NSW and Victorian Governments came out in support of the ACTU’s claim, pushing for an increase in Federal award rates by more than $20 per week.
The Victorian Government labelled the Federal Government’s offer a “mean spirited proposal”.
“An increase of $20 a week is sustainable in the current economic climate and Mr Howard is cheating Australian families with his offer of $10,” said Industrial Relations Minister Rob Hulls.
Last year the Commission granted a record wage rise of $19. The AIRC will hold hearings in April with a final decision expected in May this year.
