Auckland (Avneet Kaur)
Millions of Australian workers will receive a pay increase from 1 July after the Fair Work Commission announced a significant rise in the national minimum wage and award wages as part of its annual wage review.
Under the decision, Australia’s national minimum wage will increase by 5.75 percent, rising from $24.95 per hour to $26.44 per hour. For a full-time employee working a standard 38-hour week, this means weekly pay will increase from $948 to $1,004.90.
Workers covered by modern awards will receive a 4.75 percent pay rise.
While only a small proportion of Australians are paid the national minimum wage, around 2.8 million workers — about 21 percent of the workforce — are employed under award wage rates and will benefit from the increase.
The Fair Work Commission said the decision was made in a challenging economic environment marked by ongoing cost-of-living pressures and uncertainty in global markets. It noted that many lower-paid workers have still not fully recovered the purchasing power they lost during the sharp inflation increases experienced in recent years.
The Commission said it wanted to ensure award-reliant workers did not fall further behind financially. However, it stopped short of granting wage increases large enough to fully restore the real value of wages to pre-inflation levels.
The increase was welcomed by the Australian Council of Trade Unions, which said the decision would provide important relief for millions of lower-paid workers struggling with rising living costs.
The union movement had sought a 6 percent increase and said the outcome would help workers who spend most of their income on essential living expenses.
Business groups, however, expressed concern about the impact on employers. The Australian Chamber of Commerce and Industry argued the increase would place additional pressure on businesses already dealing with higher operating costs, inflation, fuel prices and economic uncertainty.
In a separate decision, the Fair Work Commission also confirmed it will phase out one of the lowest ongoing pay classifications in the award system. The move means the lowest ongoing award wage will now align with the national minimum wage.
The Commission said it will continue reviewing award classifications in female-dominated industries as part of wider efforts to address gender-based pay disparities and ensure equal remuneration for work of equal value.
Economists have offered mixed views on the impact of the wage increase. Some believe it is unlikely to significantly affect inflation, while others warn higher labour costs could place additional pressure on businesses and contribute to future price rises.
The new wage rates will take effect from 1 July and are expected to benefit millions of workers across various industries including hospitality, retail, healthcare, social services and administration.
