Friday, June 02, 2023, 10:55am

The FWC’s expert panel has this morning approved a 5.75% increase in all award rates and an effective 8.6% rise in the national minimum wage, emphasising that the decision would have a limited effect on the broader economy and would not spur a wage-price spiral.

The NMW rise is nominally the same 5.75% applying to awards, but because the national minimum wage is now based on the C13 rate in the manufacturing award, rather than the C14 rate that has previously applied, it is based on a higher floor, providing a one-off higher increase.

The decision will lift the NMW from $812.60 to $882.80 a week and from $21.38 to $23.23 an hour.

FWC President and panel head Adam Hatcher said this morning: “Because of the negligible proportion of the workforce to which the national minimum wage applies, this outcome will not have discernible macroeconomic effects.”

Justice Hatcher said the NMW applies to just 0.7% of all Australian employees.

Turning to the rise for award rates, he continued that “[a]s the total wages of modern award reliant workers constitute a limited proportion of the wage bill, we are confident that the increase we have determined will make only a modest contribution to total wages growth in 2023-24 and will consequently not cause or contribute to any wage price spiral”.

“We acknowledge that this increase will not maintain the real value of modern award minimum wages, nor reverse the reduction real value which has occurred over recent years.

“However, the level of wage increase we have determined is, we consider, a base that can reasonably be justified in the current economic circumstances.

“In the medium to long-term, it is desirable that modern award minimum wages maintain their real value and increase in line with the trend rate of national productivity growth,” he said.

“A return to that path is likely to be possible in future reviews when there is a reversion to a lower inflationary environment and trend productivity growth,” the president said.

The decision follows the Albanese Government making submissions asking the panel to ensure that the real wages of low-paid workers “do not go backwards” (see Related Article) and the ACTU seeking a 7% rise across all award rates (see Related Article), which is in line with the March Quarter annual inflation rate (see Related Article) and employers supporting an increase of up to 3.8% (see Related Article).

The panel – President Adam Hatcher, Vice President Joe Catanzariti, Deputy President Ingrid Asbury, Commissioner Peter Hampton and lay members Adele Labine-Romain, Marian Baird and Mark Cully – made a unanimous decision.

The RBA warned this month that if the FWC awards a “large” minimum pay rise, it could lead to a wage-price spiral (see Related Article).

The expert panel last year, as cost-of-living pressures built up, decided to lift the national minimum wage by 5.2% ($40) and all award rates by at least 4.6% (see Related Article).

Annual Wage Review 2022-23 [2023] FWCFB 3500 (2 June 2023)

Summary of decision, Annual Wage Review 2022–23 [2023] FWCFB 3501 (2 June 2023)

Annual Wage Review 2022-23 home page