Chamber warns that businesses cannot absorb significant wage hikes amid economic challenges
The Australian Chamber of Commerce and Industry (ACCI) has remained firm on its proposal of a 3.5% minimum wage hike as it warned that businesses would be unable to absorb any increases higher than that.
"ACCI reaffirms its position that a moderate increase of 3.5% in the National Minimum Wage and modern award wages is fair, reasonable, responsible, and sustainable in the current economic environment," the chamber said in its reply to the Fair Work Commission's Annual Wage Review.
"This provides a wage increase broadly consistent with inflation returning to the target band of the Reserve Bank of Australia (RBA) and an increment for productivity, recognising the current productivity growth rate."
According to the ACCI, businesses have no room to absorb significant wage hikes amid a challenging economic environment.
"Businesses are being hit from all sides," said ACCI chief executive officer Andrew McKellar in a statement.
"With fuel prices surging, margins already squeezed and confidence weakening, now is not the time to lift wages without proper regard to the broader economic environment."
Among the challenges it pointed out were volatile fuel prices and the recent abolition of junior wage rates, which ACCI estimated will deliver an aggregate wage bill increase of around 4.6% in some industries in the 2026-27 financial year.
"The Commission must consider the cumulative impact of these pressures," McKellar said. "A measured outcome is essential to protect jobs, business viability and the broader economy."
The 3.5% proposal from ACCI is much lower than the five per cent requested by the Australian Council of Trade Unions, which said recently their proposal would also have to be increased amid soaring petrol prices.
But ACCI warned that a five per cent increase would add around $48 per week to the minimum wage and cost the economy an additional $12.25 billion annually.
"Calls for wage increases of five per cent and beyond are reckless and risk throwing more fuel on the inflation fire," McKellar said.
The FWC reviews and sets the minimum wage hike every financial year. It has begun seeking submissions from various groups on the increase.
