ACCI and ANRA concerned by today’s rise in minimum wage
The Australian Fair Pay Commission (AFPC) has announced a 4.2% rise in the minimum wage, which will come into effect in October this year.
The rise, equivalent to $21.66 per week, has been met with concern from the Australian National Retailers Association (ANRA) and the Australian Chamber of Commerce and Industry (ACCI).
ANRA believe it will put increasing cost pressures on retailers who are already feeling the pinch, with the ACCI adding that it is “economically risky”.
“We understand the need to maintain incomes that will help low income households during this tough economic climate,” ANRA CEO Margy Osmond said. “This wage increase is another cost that will need to be factored in by retailers who are already feeling the pinch. The reality is that retail sales growth has flat lined this year and businesses have responded by trying to cut costs. Any increase in the wages bill could deter retailers from putting on more staff.”
ANRA is also worried that there could be more wage cost increases on the horizon. “There is an added risk that the Federal Government’s award modernisation process could further increase wages, which will put even more price pressure on retailers,” Ms Osmond added.
The ACCI believe the minimum wage increase is likely to lead to price rises as retailers, struggling to cope with the current economic climate, pass the increased costs onto consumers. “The AFPC has underplayed the impact of recent economic developments, including interest rate increases and fuel price volatility, on the businesses which must apply this wage increase,” a statement from the ACCI claimed. “The AFPC has also overstated the extent to which economic conditions support such an increase.”
Small businesses are likely to suffer the most and the ACCI adds that fuel and food price inflation coupled with interest rate rises are causing concern to businesses and not just consumers.
The decision by the AFPC will result in an increase in the minimum cost of creating a new job in Australia to over $32,000 per annum.