WA’s small businesses squeezed hardest by wage call

CCIWA Chief Economist

Aaron Morey 

Today’s decision by the WA Industrial Relations Commission to impose a 2.5% increase in the state minimum wage and award rate of pay is more than twice the current level of inflation. Rising to $779.00 per week, the decision further increases the gap between wages in the state and federal system.

It should not be more expensive for a small corner café or regional motel to employ a Western Australian, than it is for a Dome or hotel chain down the road, or in another State.

In addition to the higher rate, WA’s small businesses in the hospitality, accommodation, tourism and personal services sectors will have to start paying it 4 months earlier than incorporated competitors.

It’s the result of WA’s inflexible IR system, which does not enable the Commission to adequately take account of different circumstances impacting different sectors. WA’s small businesses are effectively punished for their proximity to our successful mining sector, whose world-leading performance has long propped up our headline economic results. Snap lockdowns, border closures and other COVID-19 restrictions also have greater impact on small businesses in sectors like tourism, hospitality, retail and personal services.

WA should either modify the system to properly account for the circumstances of the small businesses it governs, or join every other state and territory in referring IR powers to the Commonwealth. CCIWA continues to assist WA businesses who are sick of dealing with the higher costs and inflexibility imposed by WA’s relic IR system, to migrate to the Federal system.

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