Minimum wage increase ‘a challenge’

CCIWA says a 3.5 per cent increase to the national minimum wage, announced last week by the Fair Work Commission, will add to pressures already being faced by small and medium businesses.

CCIWA Chief Executive Officer Chris Rodwell said the chamber was disappointed in the increase, payable from July 1.

“This means the cumulative increase to the national minimum wage has been 15.6 per cent since 2013-14 while cumulative CPI has been only 9.5 per cent,” Rodwell said.

“Businesses are doing it tough in WA, particularly small and medium-sized businesses. The substantial increase awarded will have a significant impact on WA businesses under the national system.

“CCI’s submission to the Annual Wage Case argued for job creation to be made a priority in wage setting and urged the Fair Work Commission to consider the difficult economic and business conditions in WA. This meant showing restraint in wage fixing, recognising that many WA businesses continue to face challenging times following the end of the resources investment boom.”

The Fair Work Commission’s Annual Wage Review said the $24.30-a-week increase would not lead to undue inflationary pressure and was highly unlikely to have any measurable impact on unemployment.

The new minimum wage is $719.20, or $18.93 per hour. The review said that, compared to the position at the time of the 2016-17 review, economic indicators now pointed more clearly to a healthy national economy and labour market.

It said the labour market had improved significantly, with strong employment growth. Over the past year, the unemployment rate and the underemployment rate had declined slightly, reflecting a sharp rise in participation.

Meanwhile, full-time employment grew by 3.1 per cent, significantly more than the 1 per cent growth the previous year.

The employment-to-population ratio for people aged between 20 and 64 reached a historic high in December and working hours increased by 3.3 per cent over the year, compared to 1.8 per cent. This provided further evidence that the labour market was strengthening, the review said.

There had also been strong contributions to GDP from non-mining business investment and household consumption.

Rodwell said the FWC cited a healthy national economy and labour market as reasoning for its 3.5 per cent increase – but this was not the case in WA.

“WA’s domestic economy remains fragile, slowed down by falling business investment, flat retail trade and record high levels of unemployment and youth unemployment, while the state has the lowest inflation rate in the nation for the tenth quarter in a row,” he said.

“CCI respects the independence of the Fair Work Commission, but we are concerned that it seems to have ignored all the arguments and remain committed to awarding such high increases, year after year, without regard to the impact on business or WA jobs.”

CCI’s industrial award service provides members with email notification of updates to their award throughout the year, access at any time to a current copy of the relevant award and a comprehensive wage schedule, for ease of payroll application.

►Want to make sure you are paying your employees correctly? CCI can help. To subscribe to CCI’s industrial award service, contact the Employee Relations Advice Centre on (08) 9365 7660 or [email protected] or click here.

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