Australia’s lowest-paid workers should get a 5% pay rise – or $2,000 more a year, according to a submission from unions to the industrial umpire.
The Australian Council of Trade Unions has called for the minimum wage to increase from $20.33 an hour to $21.35, to boost the wages of 2.67m employees who rely on the annual wage review for a pay rise.
The submission comes as the Morrison government fends off criticism that Tuesday’s budget provided only temporary cost of living relief to combat structural problems including high inflation and low wage growth.
Last year inflation grew by 3.8%, compared with just 1.7% for wages, and the decline in real wages has continued this year, with inflation growing 1.25 percentage points faster than wages.
The ACTU secretary, Sally McManus, said the claim for a 5% increase, to lift the annual minimum wage to $42,184, is “what is needed for Australian workers to keep their heads above water, with inflation and the cost of living rapidly rising”.
“The Morrison government has projected real wage cuts this year, following on from the $800 cut last year,” she said. “This can be avoided if they support this wage claim.”
Submissions to the minimum wage review are not due until Friday. The largest employer groups are expected to request rises of 2% to 3%.
The Coalition government has tended to take a back seat in minimum wage cases before the Fair Work Commission, making technical submissions about the state of the economy but declining to endorse a pay rise of a particular size.
McManus said “there are practical things this government can do to lift wages, but so far they have sat on their hands or pretended it’s someone else’s job”.
In January Guardian Australia revealed aged care providers and unions had struck a deal to jointly call for pay rises in a separate work value case in that sector – but the Morrison government refused to participate in consultation, despite a recommendation from the aged care royal commission to do so.
The budget predicted real wages will grow from 2022-23, but Labor has accused the government of presiding over a period of shrinking pay packets.
The shadow treasurer, Jim Chalmers, said the government had a “pretty notorious record of overpromising and underdelivering on wages”, with 52 of the last 55 wage forecasts proving wrong.
In question time on Wednesday, Scott Morrison said “in the budget year and over the forward estimates” real wages will increase.
“And the reason that is occurring is that under this government we’ve got unemployment under 4%,” the prime minister said.
The treasurer, Josh Frydenberg, told the National Press Club’s post-budget lunch that the wage price index is “expected to reach 3.25% next year – the strongest in almost a decade”.
“Broader measures of wages are picking up even more quickly,” he said. “The national accounts measure of wages growth is expected to increase by 5% over the year to June 2022.”
