Fair Work Commission decision looms as minimum wage campaign heats up

Business lobbyists and unions are gathering in Melbourne this morning for final consultations before the Fair Work Commission (FWC) hands down a decision on the pay rate for Australia’s lowest-paid workers.

With the federal election less than a week away, the annual hearing is particularly politically charged this year, with Opposition Leader Bill Shorten writing to FWC president Iain Ross requesting a “real increase to award rates”.

Shorten, who previously declared the election a “referendum on wages”, has vowed to change the rules to force the FWC to take the cost of living pressures for minimum-wage workers into greater consideration when setting pay rates, if elected.

“We have made this unprecedented decision on behalf of Australia’s workers who rely on the award minimum rates and do it because this government has completely failed to advocate for workers in this country,” Shorten said in the letter, circulated on Tuesday morning.

Labor has made real wage growth a pillar of its election campaign and intends to withdraw the Coalition’s standing submission to the FWC’s annual wage review if it wins government on Saturday.

The 99-page government submission, filed mid-March, does not recommend a specific increase or decrease to the minimum wage, but Shorten accused the Coalition of providing a “slew of arguments which could only be understood to be advocating against real increases”.

The FWC is due to hand down its 2018-19 decision on the minimum wage in June, but with Labor promising to change the framework guiding the commission if elected, there’s potential for the process to be disrupted if Labor is fast on its feet.

Shorten told Ross it is not Labor’s intention to hold up the 2018-19 minimum wage decision, but “will not delay” its pay rise plans if elected.

The annual minimum wage decision sets the lowest pay rate in all modern awards, affecting about 2.2 million workers.

It is particularly important for small businesses as they’re less likely to have an active enterprise agreement.

Last year the FWC decided on a 3.5% increase to the minimum wage, bringing it to $719.20 per week or $18.93 an hour.

This year business groups such as the Australian Chamber of Commerce and Industry (ACCI) and Australian Retailers Association (ARA) are calling for an at-inflation increase of 1.8%.

A 1.8% increase would bring the weekly rate to $732.15, although when corrected for inflation purchasing power would remain relatively unchanged.

ARA executive director Russell Zimmerman argues small businesses in the retail sector can’t afford anything more.

“Retail certainly hasn’t got growth at the moment, we’ve seen some fairly major disasters in the industry over the last 12 months,” he tells SmartCompany, referencing a spate of high-profile collapses.

Zimmerman says he hopes the commission is given the breathing room to make its decision based on the existing framework up until the point that changes if Labor wins the election.

The Australian Council of Trade Unions (ACTU) is calling for a 6% increase this year, equating to $43.15 a week.

President Michele O’Neil will tomorrow become the first ACTU boss since former prime minister Bob Hawke to give an address at a minimum wage case by appearing at the consultation in Melbourne.

It comes as the union ramps up its living wage campaign, which has been a centrepiece of its policy agenda heading into the election.

“Australia should be proud to have been the first nation to establish a living wage, but we need to act now to renew that promise for every worker,” O’Neil said in a statement.

“The minimum wage should not just be enough to stop you starving, it should be enough to provide for a decent life for all full-time workers.”

Australian Chamber chief executive James Pearson said a balance needed to be struck this year.

“We must ensure our independent minimum wage setting system balances all interests, including the needs of employees, businesses, the economy and those searching for jobs or more work,” he said in a statement.

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