Small and family businesses will be hit hardest by the Western Australian Industrial Relations Commission’s (WAIRC) decision to increase the state’s minimum wage by 3.75%.
CCIWA had called for the increase to be no more than 2.5 %, plus a 0.5% uplift from the superannuation guarantee, which would not have stoked inflation at a time of low productivity.
The increase, which equates to $34.50 per week on average, only applies to workers who fall under the state industrial relations system.
CCIWA Chief Executive, Peter Cock, said wages costs in WA have skyrocketed in the years since the pandemic.
“Small and family businesses are going to the wall every single day, and most of them will tell you that rising costs are to blame,” he said.
“The biggest cost of all is wages, and this decision will be a blow to businesses teetering on the brink.”
Dr Cock said the 3.75% increase is well above inflation and delivers no gain in productivity.
“Insolvencies are on the rise and the simple fact is that without businesses there are no jobs.”
“While some businesses may be able to pass on the additional wage costs to their customers, many will simply have to absorb the cost.
“That will lead them to make decisions about their own business, including whether to reduce hours or staff numbers.
“CCIWA will continue to work to support the many businesses in this state who are struggling with rising costs.”
WA is the only state that still sets its own state wage, rather than using the national system, and the state minimum wage is now higher than the national minimum wage.
“When you consider which employees are covered by the state award, it’s usually the smaller family businesses who are impacted,” Dr Cock said.
“This means a local mum and dad restaurant will likely be paying a higher hourly rate than a large fast-food chain, which falls under the national system.”
CCIWA has advocated for WA to remove complexity and join other states to come under the single national minimum wage.
“This is another red tape burden on our small and family businesses in WA,” Dr Cock said.
“Having a separate state minimum wage, which applies to a much smaller section of the workforce, simply creates confusion in an already complex industrial relations space.
“Small and family businesses tell us they’re spending more and more time on red tape and compliance, and this is one area where a common-sense change could reduce some of that burden.”
