About one in five Australian workers, or 2.6 million people, will be affected by the changes from July 1, 2024.
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NewsTranscript
00:00 Our decision today is to increase the national minimum wage and all modern award minimum
00:07 wage rates by 3.75% effective from 1 July 2024.
00:15 We are announcing today the decision we have reached in this year's annual wage review.
00:21 The annual wage review is conducted in accordance with section 285 of the Fair Work Act which
00:27 requires the Fair Work Commission to undertake two tasks.
00:31 The first task is to review and make the national minimum wage order.
00:37 The only function of the national minimum wage is to set a minimum rate of pay for employees
00:43 in the national industrial relations system who are not covered by a modern award or an
00:49 enterprise agreement.
00:51 Only a very small number of employees are actually paid the national minimum wage and
00:56 will be affected by this decision.
00:59 The second task is to review modern award minimum wages.
01:05 This is the most important aspect of the review.
01:09 There are 121 modern awards which apply to employees in the national industrial relations
01:15 system in various industries and occupations.
01:19 There is also a small number of modern enterprise awards which apply to specific business enterprises.
01:26 Each modern award sets minimum wage rates for employees working in the industries, occupations
01:33 or enterprises covered by the award.
01:37 In setting modern award rates of pay, the Commission is required to take into account
01:42 the amount of the national minimum wage.
01:46 Approximately 20.7% of the Australian workforce, or about 2.6 million employees, are paid in
01:54 accordance with minimum wage rates in modern awards.
01:58 They and their employers are therefore directly affected by this decision.
02:03 In addition, there are some categories of employees who are indirectly affected by way
02:08 of the review outcomes being flowed on by various means.
02:13 Our estimate is therefore that this decision will operate upon the wages of about one quarter
02:18 of all Australian employees.
02:22 The characteristics of employees who rely on modern award minimum wage rates, and are
02:27 therefore directly affected by our decision, are significantly different to the workforce
02:32 as a whole.
02:34 They mostly work part-time hours, are predominantly women, and almost half are casual employees.
02:42 They are also much more likely to be low paid.
02:46 Because of these characteristics, the broader economic effect of annual wage review decisions
02:52 is limited.
02:54 The total wages cost of the modern award-reliant workforce constitutes less than 11% of the
03:01 national wage bill.
03:03 Furthermore, the effect of the review decision across the economy is not uniform.
03:09 About two-thirds of all modern award-reliant employees are employed in only four industry
03:15 sectors.
03:17 Other industry sectors have negligible numbers of modern award-reliant employees.
03:23 The Fair Work Act requires us to take into account specific considerations in conducting
03:28 the annual wage review.
03:30 These include relative living standards, the needs of the low paid, workforce participation,
03:38 the performance and competitiveness of the national economy, and the need to achieve
03:43 gender equality.
03:45 We have taken all of these considerations into account.
03:49 In conducting the review, we have received submissions from a range of stakeholders,
03:56 including the Australian Chamber of Commerce and Industry, the Australian Council of Trade
04:00 Unions, the Australian Industry Group, the Council of Small Business Organisations Australia,
04:08 as well as various other employer and employee organisations, and the Australian Government
04:13 and state governments.
04:16 A number of parties have advanced specific proposals for wage adjustments to be made
04:21 in the review, and these are set out in the appendix to our written decision.
04:25 However, we make clear that the annual wage review process is not one of adjudication
04:31 between competing proposals.
04:34 While we have obviously taken the submissions made into account, our statutory task is to
04:39 make our own assessment as to what constitutes a safety net of fair minimum wages.
04:48 Our decision today is to increase the national minimum wage and all modern award minimum
04:55 wage rates by 3.75 per cent, effective from 1 July 2024.
05:05 In determining this level of increase, a primary consideration has been the cost of living
05:10 pressures that modern award-reliant employees, particularly those who are low-paid and live
05:14 in low-income households, continue to experience.
05:19 This is notwithstanding that inflation is considerably lower than it was at the time
05:23 of last year's review.
05:26 Modern award minimum wages remain, in real terms, lower than they were five years ago,
05:32 notwithstanding last year's increase of 5.75 per cent.
05:37 Employee households reliant on award wages are undergoing financial stress as a result.
05:44 This has militated against this review resulting in any further reduction in real award wage
05:49 rates.
05:50 However, we also consider that it is not appropriate at this time to increase award wages by any
05:57 amount significantly above the inflation rate.
06:02 This is principally because labour productivity is no higher than it was four years ago, and
06:08 productivity growth has only recently returned to positive territory.
06:12 We have taken into account that the labour market and business profit growth overall
06:17 remain strong, however the position is less positive in some of the industry sectors which
06:23 contain a large proportion of modern award-reliant employees.
06:29 We have also taken into account that modern award-reliant employees will shortly receive
06:34 the benefit of the Stage 3 tax cuts and the Budget cost of living measures, which are
06:39 projected to increase real household disposable incomes over the next 12 months.
06:47 We have treated the forthcoming increase to the superannuation guarantee contribution
06:51 amount as a moderating factor.
06:55 The increase of 3.75 per cent which we have determined is broadly in line with forecast
07:01 wages growth across the economy in 2024, and will only make a modest contribution to the
07:07 total amount of wages growth this year.
07:11 We consider therefore that this increase is consistent with the forecast return of the
07:17 inflation rate to below 3 per cent in 2025.
07:23 We have also determined to establish a program for the timely resolution of gender undervaluation
07:30 issues arising in respect of certain modern awards.
07:35 A gender equity research project, which was undertaken as a result of the decision in
07:41 last year's review, has now been completed.
07:45 This has permitted us to identify priority areas for attention.
07:51 We have decided that modern awards and classifications applicable to early childhood education and
07:59 care workers, disability home care workers and other social and community services workers,
08:07 dental assistants, medical technicians, psychologists and other health professionals and pharmacists
08:15 will be the subject of commission initiated proceedings to examine and address gender
08:21 undervaluation.
08:24 These proceedings will commence shortly after the issue of this decision and we intend that
08:30 they will be completed by the time of next year's review, which will then move on to
08:36 the consideration of other gender undervaluation issues.
08:41 We conclude by thanking all parties that participated in the annual wage review process and we thank
08:48 them for their contributions.
08:51 We also thank the staff of the commission for their assistance and we now adjourn.
08:56 [BLANK_AUDIO]