Ai Group renews call for 'cautions, moderate' approach to wage hike

Association calls on commission to reject proposal from ACTU on wage increases for employees covered under awards

Ai Group renews call for 'cautions, moderate' approach to wage hike

National employer association Ai Group has maintained its call for a 2.8% minimum wage hike in its latest submission to the Fair Work Commission.

Innes Willox, Ai Group chief executive, said the latest economic data and various provisions of the Federal Budget supports the proposal of the association.

"That is, that the Annual Wage Review Panel should take a cautious and moderate approach to increase award and minimum wages by not more than 2.8% this year," Willox said in a statement.

According to the submission, the 2.8% minimum wage hike would avoid unduly exceeding business capacity to pay, which contributes to disemployment.

"It would also avoid unreasonably contributing to the persistence of inflation," it added. "In light of current inflation forecasts, and the government's announced income support measures, it would also ensure a real increase in the disposable income of employees on the NMW (National Minimum Wage) and MAMW (Modern Award Minimum Wages)."

The association also pointed to recent wage data, where private sector annual wage growth fell for the first time since the September quarter of 2020.

"The Commission also needs to consider in its review the latest data which suggests a broad-based slowing of private sector wages," Willox said. "This data provides further evidence in support of Ai Group's arguments that the labour market is continuing to weaken in early 2024."

Disputing union proposal

The submission also called on the commission to reject the recent proposal from the Australian Council of Trade Unions (ACTU) to hike pay for employees covered under some awards, citing gender-based undervaluation.

"In our view, the commission could not responsibly grant the additional increases claimed," Willox said.

"There is an absence of any evidentiary basis upon which the commission could soundly do so and the nature and process of the AWR (Annual Wage Review) does not lend itself to properly considering the complex issues arising from the ACTU's claim."

The Ai Group pointed out the proposal's potential impact on cost increases for employers.

"Ultimately, the reckless granting of unsustainable wage rises proposed by the ACTU would not only harm the employers impacted but also their employees and the broader economy and community given the crucial sectors caught by the union proposal," Willox said.

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