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Australian government warns against minimum wage increase during Covid-19 crisis

The Morrison government has cautioned against a major increase in Australia's minimum wage, citing concerns about job creation.

Source: istock.com

It comes less than a week after New Zealand raised its minimum wage to $20 per hour, to a mixed response.

Australia's minimum wage is currently AU$19.49, equivalent to around NZ$21.12.

In a submission to the Fair Work Commission's annual review, the Australian government notes a continuing uncertain global and domestic economic outlook.

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"Higher labour costs during this challenging period could present a major constraint to small business recovery and may dampen employment in the sector," the submission says.

It urges a "cautious" approach that takes into account the importance of job creation and business viability through the economic recovery post-coronavirus.

"The risk of domestic outbreaks and ongoing disruptions to other major economies mean the economic environment remains uncertain," the government says.

"Although the vaccine rollout is underway, Covid-19 outbreaks that would necessitate further containment measures remain a significant risk."

The Australian Council of Trade Unions, which is pushing for an increase of AU$26 a week (AU$0.68 per hour, equivalent to NZ$0.74 per hour), attacked the government's submission.

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1 NEWS answers five questions about the minimum wage increase.

ACTU assistant secretary Scott Connolly said company profits were soaring but the coalition wanted wages to go backwards in real terms.

"Make no mistake, while the government didn't have the guts to say it explicitly, it has today given the green light to the Fair Work Commission to freeze the minimum wage, relied on by one in five workers," he said today.

Connolly said the federal government's hypocrisy was breathtaking.

"They say it's fine to get rid of JobKeeper because the economy is recovering, but workers shouldn't have a pay rise because the economy is faltering," he said.

"They can't have it both ways."

The national minimum wage increased by 1.75 per cent to AU$753.80 (NZ$816.61) per week after last year's review but the rise was delayed at least three months for most workers.

In 2019 there was a three per cent minimum wage increase, which was lower than the previous year's 3.5 per cent rise and the 3.3 per cent hike in 2017.

The National Farmers' Federation wants the minimum wage frozen until economic conditions improve and market volatility decreases.

It argues trends indicating a recovery need to emerge alongside the rollout of the AstraZeneca coronavirus vaccine.

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EMA chief executive Brett O'Reilly and YWRC business manager Tony Stevens speak about the $1.10 hourly increase to the minimum wage. Source: 1 NEWS

The restaurant and catering industry has called on the commission to stagger any increase to bring it into line with last year's decision.

Workers in the pandemic-hit food, retail, accommodation, arts, recreation, tourism and aviation sectors didn't receive the minimum wage boost until February.

The National Retail Association is also calling for a delay for that group of workers until November 1.

The Restaurant and Catering Industry Association says the commission should freeze the rate if it decides to put its decision into force on July 1.