Fair Work announces $17 minimum wage increase: Midday roundup

Fair Work Australia has announced a $17.10 pay rise per week for the country’s lowest paid workers, saying it’s taking a middle-of-the-road approach after unions lobbied for a $26 increase.

The change will take effect from July 1, when the national minimum wage will come to $606.40 per week.

Both unions and business groups have attacked the decision; unions saying the rise doesn’t go far enough, while business says it is too much.

FWA president Justice Iain Ross said in a statement the increase was “moderate” and could assist living standards for the lowest paid.

“Compensation has already been provided through tax cuts and transfer payments, and further compensation by minimum wage adjustments would amount to double dipping,” he said.

He noted over the past decade that earnings had risen faster than actual rates of pay for individuals.

“As a consequence, those reliant on award rates of pay have fallen behind the average earnings of workers and, in this sense, have not retained their relative standard of pay,” he said.

He added FWA was not persuaded to take increases to the superannuation guarantee into account.

Manufacturing activity sinks to nine-month low

Manufacturing activity in Australia has reached a nine-month low, according to the latest figures from the Australian Industry Group-PriceWaterhouseCoopers Australian Performance of Manufacturing Index.

The index fell 1.5 points to 42.4 in May, well below the 50-point level separating expansion from contraction.

Only three subsectors managed to record increases in activity – paper, printing and publishing.

“Nevertheless, these factors were swamped in May by renewed household caution in the face of international and domestic uncertainties and weakness in residential and commercial construction,” AIG chief executive Innes Willox said in a statement.

“The fundamental structural pressures facing non-mining trade-exposed industries such as manufacturing continued to bite.”

Markets fall on house price data, poor offshore leads

The Australian sharemarket has fallen once again after poor offshore leads and new data showing home values have fallen again despite the RBA cutting rates.

The benchmark S&P/ASX200 index fell 28.9 points or 0.7% to 4047.4 at 12.00 AEST. The Australian dollar has now fallen to US96 cents.

In the United States, the Dow Jones Industrial Average fell 26 points or 0.2% to 12,393.4.

David Jones waves aside private equity rumours

David Jones chief executive Paul Zahra has dismissed suggestions private equity firms are looking to buy the company.

“As for the private equity play, certainly there’s been lots of rumours but we’ve not had any credible offers to date,” Zahra told the Herald Sun.

Analysts suggest the company may be a target as its shares continue to fall. It was trading this morning at $2.18.