Millions of Australians to get pay rise
Millions of workers on industry awards will get a 4.75 per cent annual pay rise, but minimum wage earners will receive a larger boost of six per cent.
Almost three million Australian workers will get a 4.75 per cent pay boost after the industrial umpire’s annual minimum and award wage review.
The Fair Work Commission’s decision on Tuesday to lift the minimum wage to $1004.90 a week followed the federal government’s call for a “sustainable” real wage rise.
The decision came amid ongoing uncertainty around the Middle East conflict and how long the Strait of Hormuz would remain shut, keeping upwards pressure on inflation.
The increase is above the 4.2 per cent headline inflation rate in the year to April. But the Reserve Bank has forecast inflation to rise to 4.8 per cent by the end of June.
Fair Work Commission president Adam Hatcher said this year’s decision was “particularly challenging”. He said it wasn’t practical or responsible to award a pay rise above 5 per cent – what is needed to close the real wage gap that has opened up since the Covid-19 pandemic.
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“However, we consider that we should at least ensure that modern award-relied employees generally are not worse off in real terms than they were as at July 1, 2025,” Hatcher said.
The new national minimum wage will be $26.44 an hour (up from $24.95).
The commission also made a structural adjustment to the lowest pay classifications to effectively raise the minimum wage relative to the rest of the system.
The decision follows a 3.5 per cent increase in 2025-26. This year’s ruling falls between the range of suggestions from unions and business groups.
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In its submission to the commission’s review, the Australian Council of Trade Unions called for a 6 per cent increase, arguing workers were still behind in real terms following the post-Covid inflation spike.
But employer body Australian Industry Group called for a lower rise of 3.9 per cent, arguing the ACTU claim would stoke inflation.
While the federal government does not nominate an exact figure, Treasurer Jim Chalmers said workers deserved a decent real wage increase.
“We want to see it go up further today, and that’s because we recognise that higher wages and lower taxes are the best way to help working people with the cost of living,” he told ABC TV ahead of the decision.
The decision covers about one in five employees. Because they tend to be lower paid, it amounts to only 11.2 per cent of the national wages bill, according to commission estimates.
Economists say the decision influences pay rise claims in occupations across the economy, and therefore results in broader flow-on effects.
The pay rise kicks in on July 1.
-with AAP
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