Millions of Aussies set to receive cost-of-living pay bump
<p>Prime Minister Anthony Albanese has thrown his government’s support behind a “fair” pay rise for Australia's lowest-paid workers, setting the stage for a potential showdown with employer groups ahead of the Fair Work Commission’s annual wage review.</p>
<p>In a submission to the Commission, the federal government recommended a real wage increase – meaning one above the rate of inflation – for around three million Australians earning either the minimum wage or under an industry award. The push is part of Labor’s broader strategy to ease cost-of-living pressures and boost household incomes.</p>
<p>“This will help around three million workers across the country, including cleaners, retail workers and early childhood educators,” said Treasurer Jim Chalmers and Employment Minister Amanda Rishworth in a joint statement. “Boosting wages, cutting taxes for every taxpayer and creating more jobs are central parts of our efforts to help Australians with the cost of living.”</p>
<p>While the government did not specify an exact figure, it made clear that any increase should outpace inflation, a stance likely to be met with resistance from employers. Business groups, including the Australian Chamber of Commerce and Industry, are calling for a more modest 2.5% increase, warning that anything higher could hurt struggling businesses, especially with superannuation contributions set to rise from 11.5% to 12% on July 1.</p>
<p>Last year, minimum wage earners received a 3.75% pay rise, lifting the national minimum wage to $24.10 per hour, or $915.90 per week. With headline inflation then at 3.6%, workers saw only a marginal real wage increase of 0.15%.</p>
<p>However, the economic backdrop has shifted. In the year to March, overall wages grew by 3.4% while the consumer price index rose just 2.4%, indicating a real wage growth of 1% for many Australians. Inflation is now within the Reserve Bank’s target band of 2-3%, which the government says supports its call for a generous, yet “economically responsible” wage hike.</p>
<p>“An increase in minimum and award wages is consistent with inflation sustainably remaining within the RBA's target band and will provide further relief to lower income workers who are still doing it tough,” Chalmers and Rishworth added.</p>
<p>Since Labor took office in 2022, the minimum wage has surged by historically high margins: 5.2% in 2022 – the largest rise in 16 years – and 5.75% in 2023. In total, the minimum wage has increased by $143 per week under the Albanese government.</p>
<p>Despite concerns from employers over weak economic growth and rising business costs, the government remains optimistic about a rebound in domestic demand. Its submission acknowledged global risks, including the potential impact of Donald Trump's trade policies, but forecast stronger growth in 2025 and 2026.</p>
<p>Prime Minister Albanese reinforced Labor’s commitment to wage growth during a cabinet meeting this week, saying a further increase to the minimum wage would be one of his top priorities heading into the next federal election. “Labor will always stand for improving people's wages and conditions,” he declared.</p>
<p>Still, the looming expiry of the government’s $75 quarterly electricity rebates at the end of 2025 poses a risk of reigniting inflationary pressures – something the Fair Work Commission will weigh carefully as it prepares to announce its decision in June.</p>
<p>The outcome of the review will directly affect 180,000 workers on the national minimum wage and an additional 2.7 million on industry awards, making it a critical flashpoint in the battle over how best to balance worker welfare and economic sustainability.</p>
<p><em>Images: Instagram</em></p>
