A significant increase to the minimum wage would add further pressure to businesses already “being hit from all sides”, the Australian Chamber of Commerce and Industry (ACCI) has warned.
“With fuel prices surging, margins already squeezed and confidence weakening, now is not the time to lift wages without proper regard to the broader economic environment,” ACCI CEO Andrew McKellar said.
The FWC reviews the national minimum wage each year, with its decision handed down in June and taking effect from July 1.
Under the Fair Work Act 2009, the national system covers most Australian employees and flows through to award agreements, where nearly 21% of the nation’s workforce get the minimum rate.
WA’s minimum wage is also reviewed annually, announced in June and effective from July 1. About 27,000 employers and 300,000 employees come under the State system.
ACCI asks for a fair increase
ACCI has called for a moderate increase of 3.5% to the national minimum wage and modern award wages. This would match last year’s, rise when economic conditions were more stable, McKellar said.
“This is a fair and responsible proposal in the current economic environment, and is in line with underlying inflation,” he said.
“Calls for wage increases of 5% and beyond are reckless and risk throwing more fuel on the inflation fire.”
ACCI modelling found a 5% increase would add around $48 per week to the minimum wage and cost the economy an additional $12.25 billion a year.
Concerns over additional wage changes
ACCI also warned against proposals to re-benchmark the minimum wage from the C13 to the C12 rate, which would add a further 3.6% increase, or more than $34/wk per employee, on top of any rise after this year’s review.
Further wage pressures will come from the planned abolition of junior wage rates, with retail, accommodation and food services expected to be among the most affected industries.
While the changes would be phased in between December 2026 and July 2029, ACCI analysis showed the junior rates decision would increase aggregate wage bills by around 4.6% across those sectors in the 2026-27 financial year, not accounting for any increase from the Annual Wage Review.
“The Commission must consider the cumulative impact of these pressures,” McKellar said.
“A measured outcome is essential to protect jobs, business viability and the broader economy.”
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CCIWA’s Employee Relations Helpline provides an Industrial Award Subscription Service which includes up-to-date communication with award variations, allowing businesses to be across crucial changes. Our employee relations experts can also perform Wage Spot Checks to assist employers with minimising underpayment risks.
For more information on minimum and award rates, contact the Employee Relations Helpline on 08 9365 7660 or [email protected].
