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Annual Wage Review

Media Release

Today's annual wage review decision reflects the highly difficult circumstances which the Fair Work Commission (FWC) had been required to consider in delivering its decision.

Attorney-General and Minister for Industrial Relations, Christian Porter, said no-one could begrudge workers a fair pay rise, especially the lowest paid, but the decision represented a difficult balancing exercise against the necessity to protect businesses at their most vulnerable time from increased costs that can decrease employment. In this sense, the decision represents a different approach to that applied during the Global Financial Crisis where the Fair Work Commission determined a significant wage decrease in real terms through freezing the minimum wage.

'The Australian economy has performed much more strongly through this COVID-19 pandemic than many other countries,' the Attorney-General said.

'Despite that, everyone would acknowledge the economic difficulties facing the economy particularly the hospitality, tourism, retail and many other industry sectors.

'The Government urged the Commission to adopt a very cautious approach to determining this year's increase and to focus on keeping people in jobs and contributing to an environment to restore jobs as Australia moves out of the pandemic crisis.

'We saw yesterday the stark impact of the pandemic on Australia's jobs market, with 825,000 jobs lost in recent months.

'The Commission has attempted to strike a balance between exercising restraint in the restriction of the wage increase to slightly below inflation, at 1.75 per cent and staggering its introduction across industry sectors.

'The decision will see that workers at the lower end of the wage scale will receive some increase, but we need to recognise that employers and small businesses are working very hard to keep their doors open and rebuild post-pandemic and anything that can be done to ensure they are not burdened by large increases to business costs is important.'

The Attorney-General said the Commission had recognised the impact of COVID-19 across the economy and its varying impact on industry sectors.

'This is an annual wage review unlike any we have seen before and is one which reflects the unique circumstances facing the Australian economy,' the Attorney-General said.

'By staggering the implementation of the increase across industry sectors, the FWC has engaged in an attempt to ease the impost of wage rises on industry sectors most deeply affected by the pandemic.

'This provides at least some breathing space as these industries work hard to get back on their feet, rebuild their businesses and re-hire staff who have lost jobs or suffered reduced hours as a consequence of the pandemic. But these businesses need more help which is the point of our industrial relations reform process.

'Job creation remains the Morrison Government's number one priority and we will continue to work in the interests of all Australians by doing what is necessary to get those who've lost jobs back into meaningful employment again as quickly as possible.

'My portfolio of industrial relations is playing a critical role in rebuilding the economy through the IR reform process announced by the Prime Minister. The first working group meetings will commence late next week and continue through until September seeking to identify key areas of agreement between employer and employee representatives for reform to help rebuild the economy and create jobs.'