Australia, Industry News, News

ACCI, ACTU at loggerheads over annual wage review

Three mining workers walking down a dirt road during a rescue mission.

The Australian Chamber of Commerce and Industry (ACCI) and Australian Council of Trade Unions (ACTU) are in direct conflict over the Fair Work Commission’s annual wage review.

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As part of the annual wage review, the Fair Work Commission hears from unions, employers, and governments before setting minimum and award wages for workers across Australia that come into effect on July 1, 2024. The ACTU is seeking a five per cent increase in the minimum and award wages as part of its submission, with ACTU Secretary, Sally McManus, saying the five per cent increase is “fair and reasonable”.

“The lowest paid workers are the ones who are the hardest hit by inflation, they need a 5 per cent pay increase to start to get ahead again and make up for the real wage losses over the last few years,” she said. “When inflation goes up businesses are able to adjust their prices to protect their margins, but workers pay does not move so easily. This is why the annual wage review is so important; it is when the lowest paid workers have to chance to catch up, and the result makes an enormous difference to millions of families.”

The ACCI, on the other hand, is calling for an increase of no more than two per cent, citing the fragility of business and economic conditions, easing inflationary pressures, negative productivity within the Australian economy, and the “exceptional” wage increase the Fair Work Commission has delivered over the past two years.

“Any wage increase must be linked to productivity to be sustainable. A failure to align wage growth with genuine productivity improvements will add to inflationary pressure,” ACCI chief executive officer Andrew McKellar said.

“Another excessive increase runs the risk of compounding ongoing input cost pressures for Australian businesses, in particular small businesses who are struggling to maintain employment in an already complex environment.”

“A 5 per cent increase, as called for by the ACTU, is irresponsible, unaffordable and increases the risk that interest rates will be higher for longer.”

According to the Australian Government’s Treasury, productivity growth slowed down from 1.3 per cent to 1.2 per cent, with the last decade being the slowest in 60 years.

The Reserve Bank of Australia’s latest quarterly publication of the Consumer Price Index has inflation marked at 4.1 per cent in December 2023 – 2.9 per cent less than December 2022, but still above the RBA’s ideal inflation rate of two-to-three per cent.

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