Western Australia’s 17-year high unemployment rate could be even worse under a Federal Labor Government if Opposition Leader Bill Shorten enacts the ACTU’s living wage proposal.

Chamber of Commerce and Industry WA (CCI) business polling has revealed that more than three-quarters (76%) of Western Australian businesses would be forced to lay off workers, reduce existing workers’ hours or delay hiring new workers if their wage bill increased by just 5 per cent – less than half the ACTU’s proposed increase.

Federal Labor has flirted with backing the ACTU’s intervention into the workings of the independent Fair Work Commission and to increase the minimum wage by 11 per cent over two years – a decision that would cripple some small businesses and cost WA jobs.

At a time when WA has the equal highest unemployment rate in 17-years at 6.8 per cent, Federal Labor needs to consider the WA jobs that would be lost if they proceed with this proposal.  

There are more than 97,000 West Australians who are unemployed and just over 16,000 advertised job vacancies in WA, which means job creation is critical to turn the State’s high unemployment rate around. Forty-four per cent of businesses would delay hiring new staff if their wage bill increased by 5 per cent, putting the WA Government’s 150,000 job creation target at risk. 

The polling also revealed that one in five small businesses would be forced to reduce their own take home pay and almost half (47%) of small businesses would be forced to reduce the hours of existing staff, putting more pressure on other workers to pick up an increased workload.

Almost 60 per cent of small business owners earn less than $50,000 a year. Additional wages from creating a new job or giving an existing worker more hours must come out of that $50,000.

Federal Labor must recognise that the east coast of Australia and WA are experiencing very different trading conditions and implementing the living wage proposal would be blind to these differences. It is critical that any future Federal Government considers the unique circumstances of WA and does not base their policies simply on the economic health of New South Wales and Victoria.

Small businesses in WA have now made it clear that if Federal Labor implements the ACTU’s living wage proposal it would cost WA jobs and push unemployment even higher.

CCI urges Opposition Leader Bill Shorten and Federal Labor to make their position on implementing the living wage proposal clear by ruling it out altogether.