Minimum wage rises by 3%

Australia's minimum wage is set to rise by 3%.

The Fair Work Commission has determined Australia's national minimum wage (NMW) will increase by 3% to $19.49 per hour.

Effective from the first full pay period starting on or after July 1, the increase will apply to all employees whose pay rates are determined by the NMW or a modern award, and employees who aren't covered by an award or agreement.

Employees covered by an award will see their award rate increase by 3%.

According to the Fair Work Commission's statement on the decision, Australia's prevailing economic circumstances provide an opportunity to provide to improve the relative living standards of the low paid "and to enable them to better meet their needs, by awarding a real increased in the NSW and modern award minimum wages".

The Commission noted that while its overall assessment of the living standards of NMW and award-reliant employees recognised improvement, some low-paid award-reliant employee households have household disposable incomes less than 60% of the median income relative poverty line.

The Commission also said women were disproportionately represented among those on the NMW and reliant on modern award minimum wages, thus the gender pay gap could be closed to some degree with an increase in minimum wages.

"We are satisfied that the level of increase we have decided upon will not lead to any adverse inflationary outcome and nor will it have any measurable negative impact on employment," the Commission said.

"However, such an increase will mean an improvement in real wages for those employees who are reliant on the NMW and modern award minimum wages and an improvement in their living standards."

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell said she backed the Commission's independent process in arriving at the decision, but said the increase - which exceeds inflation - would add pressure to small businesses.

"The decision to pay Australia's 2.2 million award dependent workers an extra $21.60 per week from July 1 fell well short of the $43 per week the Australian Council of Trade Unions lobbied for but was also more than the 2% business groups wanted," Carnell said.

"Australia already has one of the highest minimum wages in the world. The increase awarded exceeds inflation and that will impact small businesses, many of which are doing it tough right now."

Read more: MinimumAustraliaFair Work CommissionFamily Enterprise Ombudsman Kate CarnellAustralian Council of TradeAustralian Small Business
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