Annual Wage Review

Public news

While the increases in some Awards, including the Vehicle Repair, Services and Retail Award, have only just commenced, the Fair Work Commission is already well underway in preparing for the next Annual Wage Review, due by 1 July 2021.

The Commission is in the process of gathering research and statistics to consider the appropriate response to the wage review, including the impact of COVID-19 on businesses, and the general state of the economy.

Many submissions received to date, including from the Government of SA, have recommended a cautious approach, while recognising the need to ensure that the minimum wage, and the similar benchmarking in various Modern Awards, keeps pace with any increase in living costs.

The ACTU in its submission to this year's minimum wage review will seek a 3.5% increase across all award rates, maintaining that pay growth is crucial for the post-pandemic economic recovery. The claim equates to an extra $26.38 a week for a full-time worker on the national minimum wage, which would rise from $753.80 ($19.84 an hour) to $780.18 ($20.53 an hour).

The ACTU describes last year's 1.75% minimum wage increase as "very low" and exacerbated by delaying rises for workers in some sectors to as late as February this year. The ACTU is highlighting the role that higher wages could play in the post-COVID-19 economic revival.

The ACTU says Australia has also fallen behind the UK and New Zealand in meeting the "living wage" benchmark of 60% of median income, with the Australian minimum wage sitting at 52% of median earnings. The ACTU last year sought a 4% increase but the Commission's minimum wage panel settled on 1.75% in recognition of the effects of the pandemic.

In the Commission's first split decision in 23 years, new panel member economist Professor Mark Wooden delivered a minority ruling that supported a wage freeze. FWC president and head of its minimum wage expert panel, Justice Iain Ross, said the majority chose three operative dates for increases based on the effects of the pandemic on each sector.

Meanwhile, the Ai Group will argue the FWC needs to take a "particularly cautious approach" this year given the economic and business risks associated with the end of JobKeeper on March 28. The Ai Group noted that "It is also important for the FWC to take into account that Australia already has the highest national minimum wage in the world (on a purchasing power parity basis)."

The MTA will continue to monitor and provide updates on the annual wage review. It is likely that we will not see the same staggering of any increases, but it is likely that some cautious increase will be considered, in line with CPI.

If members wish to provide feedback that will support any consultation and submissions, please contact the WR team on wr@mtasant.com.au, or on 8291 2000.