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Minimum Wage To Rise Across Australia

Fair Work Commission boosts wage for lowest-paid workers

The Fair Work Commission has decided to raise the federal minimum wage by $24.30, to $719.20 per week, the biggest increase to the wage in years.

The FWC announced on Friday the national wage, as well as the minimum wage in all award categories, would rise by 3.5 percent from July 1. In its annual decision handed down in Melbourne, the commission ruled such an increase would boost living standards for Australia's lowest paid workers, while having a low risk of adverse effects on employment or the wider economy.

"The level of increase we have decided upon will not lead to undue inflationary pressure and is highly  unlikely to have any measurable negative impact on employment," the commissioner said.

"However, such an increase will mean an improvement in the real wages of those employees reliant on the national minimum wage and modern award minimum wages, and will, absent any negative tax transfer effect, result in an improvement in their living standards."

Unions had pushed for a $50 per week rise to the minimum wage, taking it from the current weekly $694.90 to $744.90. Employer and business groups had opposed the plan, lobbying for the rise to be limited to around $12.50 per week.

Immediately following the FWC decisions, Australian Council of Trade Unions secretary Sally McManus said unions welcomed the increase, but that the minimum wage was still not a "living wage".

"It will mean $1200 extra in full-time workers' pockets a year because of the trade union movement," McManus said.

"It is a step forward towards a living wage but it's not a living wage. We need in our country, for no full-time worker to live in poverty."

The FWC said increasing the minimum wage to the level requested by unions would have "substantial risk of adverse employment effects" such as employers cutting jobs or decreasing hours, with the commission settling on a figure slightly less than half that lobbied for.

However, the FWC said the national economy was performing well and business profits were rising, and that employers could afford to absorb the wage rise.

The rise will come into effect from July 1, the same day penalty rate cuts for some of Australia's lowest-paid industries also kick in.

The FWC said around 2.3 million Australians have their pay set by the minimum wage.

The FWC said previous minimum wage increases had failed to help families surviving on the payment.

"The real value of the national minimum wage has increased by 5.8% over the last decade and by 4.3% in the past five years. However, this has not resulted in improvement to the actual or relative living standards for many categories of national minimum wage and award-reliant households due to changes in the tax transfer system," the FWC said in a statement.

More to come.