October 26, 2006
The Australian Fair Pay Commission today announced an increase of $27.36 per week in the standard Federal Minimum Wage and in all Pay Scales up to $700 per week. This covers just over one million Australian workers who rely on the Commission’s decisions for adjustments in their wages.
The Commission also awarded an increase of $22.04 per week to all Pay Scales paying $700 per week and above, or more than $36,000 per year, representing another 220,000 workers, about 2% of the workforce.
Both increases flow on to junior employees, employees to whom training arrangements apply and employees with a disability and take effect from 1 December 2006.
The Commission’s next decision will be handed down in mid 2007.
Professor Ian Harper, Chairman of the Australian Fair Pay Commission, said this decision was balanced and fair and provided a real increase for low paid workers.
Today’s decision takes into account;
- the period of almost 18 months since the last pay increase for Pay Scale reliant workers;
- the sensitivity of low-paid employment to changes in wage levels as well as the incentives for individuals to seek and remain in employment;
- the fact that the economy and labour market have continued to perform strongly although not uniformly;
- movements in consumer prices;
- the potential impact on unemployment and inflation.
Lastly, and importantly, this decision takes into account the requirement to provide a safety net for the low paid.
“The higher increase for workers earning less than $700 per week reflects findings in the Commission’s research and advice contained in submissions that lower-paid workers are more reliant on minimum wages,” Prof Harper said.
Extensive consultation and research revealed a number of complicated issues around the wages of juniors, trainees and apprentices and the Commission has undertaken to look more closely at these issues when it hands down its next decision in mid 2007.
The Commission has also made changes to allow more workers with a disability to access the supported wage system and to fill gaps in the coverage of minimum wages for workers with a disability.
Professor Ian Harper thanked everyone who had input to this important decision.
“The Commission considered the results of commissioned research, almost 200 submissions, 13 public consultations across the country, nine focus groups and over 100 stakeholder meetings in reaching its first decision.
“We consulted widely through a process which gave the low paid and their representatives a voice. We have been open and transparent in gathering this information and have published our research and submissions on the website.
“We will monitor the effects of the decision on the economy and we believe the timing of the next wage review allows us to do this in a comprehensive and thorough manner. We will be watching for any impact this has, particularly on unemployment, but believe the increase is sensible and sustainable given current economic conditions,” Prof Harper said.
BACKGROUND
The Australian Fair Pay Commission was created by s20 of the Workplace Relations Act 1996 (WR Act), as amended by the Workplace Relations Amendment (Work Choices) Act 2005.
The main wage-setting powers of the Commission are:
- Adjusting the standard Federal Minimum Wage (FMW)
- Determining or adjusting special FMWs;
- Determining or adjusting basic periodic rates of pay and basic piece rates of pay; and
- Determining or adjusting casual loadings.
The legislation assigns the Commission an over-arching objective to promote the economic prosperity of the people of Australia.
More specifically, in performing its wage-setting function, the Commission must have regard to:
- The capacity of the unemployed and the low paid to obtain and remain in employment;
- Employment and competitiveness across the economy;
- Providing a safety net for the low paid; and
- Providing minimum wages for junior employees, employees to whom training arrangements apply and employees with a disability that ensure those employees are competitive in the labour market.
These criteria guided the Commission in making its first wage-setting decision.
For more information visit www.fairpay.gov.au
ENDS