ACTU case: $30 wage increase

ACTU secretary Greg Combet said unions were concerned to make sure that almost two million minimum wage workers gained some reward for their effort.

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“The economy has grown strongly over a long period of time now and it is always a battle to get people with no bargaining power, that is minimum wage workers, an increase that will keep their living standards at pace with inflation,” he told ABC radio.

“The federal government’s new laws have meant that minimum wage workers will experience probably something up to an 18 months freeze before they will get anything out of the so-called fair pay commission.

“What we are doing is asking for a $30 increase which when you annualise it out is around four per cent.”

Australian Chamber of Commerce and Industry (ACCI) chief executive Peter Hendy said the ACTU’s proposed $30 increase would actually be a 6.2 per cent increase.

“And that is far in excess of the inflation rate,” he told ABC radio.

He said after this week’s high four per cent inflation figure, “the last thing we want to do is build in higher inflationary expectations.”

Mr Hendy said ACCI would make its own submission to the Australian Fair Pay Commission, not opposing an increase but not advocating any particular figure.

“We will be arguing before the commission that if we can get a result that is closer to the inflation rate, that would be a better result and that would be good for unemployment,” he said.

“But 6.2 is simply way beyond what would be economically sensible and would be detrimental to employment.

“Our concern would be that it would build in a higher inflationary expectation, creating wage price spiral which would be dangerous for the economy and that has a direct employment consequence.”