The Fair Work Commission will decide Wednesday on how much additional an estimated 2.3 million low-paid and price-dependent workers will receive on July 1.
Right now, the minimum wage is $20.33 per hour.
But with inflation currently at 5.1 percent, the new Albanian government is calling for wages “not to fall”.
It is uncertain whether the government will push for higher wage increases down the line, given a new warning from the Reserve Bank governor that inflation could rise by seven percent by the end of the year.
In the closing days before last month’s elections, Anthony Albanese took the unusual step of ‘absolutely’ agreeing to an increase in the minimum wage.
The government has submitted a proposal to the Commission to give minimum wage workers a 5.1 percent wage increase – bringing the minimum wage to $21.37 an hour. In comparison, unions have called for a 5.5 percent increase.
Meanwhile, leading employers’ organizations had urged that the annual increase be limited to 2.5 to 3.2 percent.
Camera icon Prime Minister Anthony Albanese had submitted a proposal to increase the minimum wage in line with inflation. Sam Ruttyn Credit: News Corp Australia
It follows a warning from Reserve Bank governor Philip Lowe Tuesday night that inflation could hit seven percent by the end of the year, with multiple rate hikes likely over the period.
Dr. Lowe predicted that inflation would not begin to fall until the first quarter of next year.
“I’m confident that inflation will come down over time, but we’re going to have higher interest rates to get that result,” Dr. Lowe said at ABC’s 7:30 a.m.
Dr. Lowe and the Reserve Bank have come under fire after disregarding their prediction last year that interest rates would not rise before 2024.
Cash interest rates rose 0.5 percent last week, the second rise in as many months.
“Sometimes my comments are interpreted as if I made a promise, or a very strong statement, that interest rates would stay where they were until 2024,” said Dr. Lowe.
“In our communication and way of thinking, it was mainly a conditional statement.
“The economy has not evolved as expected, it has been much more resilient, and inflation has been higher, and we thought we had to respond to that.”
Meanwhile, public office holders and MPs will receive a 2.75 percent pay increase beginning July 1, meaning a backbencher’s salary will rise to $217,060.
MPs’ pay increases were frozen during the pandemic, and with inflation tipping to seven percent by the end of the year, the 2.75 percent increase is a real pay cut.
Mr. Albanese will receive an annual wage of $564,364, excluding expenses and allowances, while opposition leader Peter Dutton will earn $401,561 yearly.
