Money Australia – July 2017

T

he $22 per week increase
in the minimum wage rep-
resentslessthanhalfofthe$45
arguedforintheACTU’sclaim.
The $45 per week increase
was the amount that we calcu-
lated was necessary to rebuild
the minimum wage to the levels
which used to underpin the
guarantee that full-time work
meantawageyoucouldliveon.
The Fair Work Commission in
its ruling stated that the $22 per
weekincreasewouldnotliftall
workers out of poverty. The fact
that anyone in Australia is both
inworkandinpovertyisentirely
unacceptable.
Corporate profits rose almost
40%onayearlybasistoMarch
butwagesaregrowingat1.9%
and aren’t keeping pace with infla-
tion. Australia needs a pay rise
rather than a pay cut. The system
is fundamentally broken and has
given too much power to corpora-
tions. The $45 per week mini-
mum wage claim was a part of
ourefforttoredressthatimbal-
anceanditisdeeplydisappoint-
ingthatithasnotbeenadopted.
The government’s budget is
underpinned by an assumption
that wages will grow by up to

3.75% over the next four years,

and yet the government’s

actions have completely

undermined this objective.

The government, public ser-

vice and countless academics

agreethatwagegrowthisa

huge problem for the Australian

economy, but the union move-

ment stands alone fighting for

increases to the minimum

wage, defending existing condi-

tionsandworkingaroundthe

countrytowinwageincreases

through bargaining.

Workersneedmorework,

better pay and more security.

This government could have

arguedforanincreaseinthe

minimum wage. It didn’t.

SALLY MCMANUS

Australian Council of

Trade Unions

T

he lowest paid workers will

be pleased (although still

lowpaid)astheextra$22.20

a week will be welcome.

For small businesses, it is a

mixed result. In a small business,

theemployerisalsoaperson;in

bigbusinesseseveryoneisan

employee. In a small business,

any extra costs are lost income

for the business owner who will

eitherhavelessincomefortheir

families or will have to pass the

extra costs onto the consumer.

Oftenwecannotpassonthe

extracostsduetothenatureofa

particular industry, or the fact

that competition often deter-

mines price, and big companies

such as Coles and Woolworths

can absorb increased costs as a

way of forcing competitors from

the market. There is the same

issue with hospitality, where

competition is fierce. In other

industries the costs may be

more readily absorbed or easi-

ly passed onto customers.

In the end the great majori-

ty of small business employ-

ers do not begrudge low-paid

workers a pay rise. As one of

mymembersstated:“Idon’t

want to be working next to a

miserable worker but I also want

to have a viable business and get

returnformyowneffort.”

Forwagestoincreaseweneed

a good economy where good,

efficientbusinessownerswillget

arewardfortheirefforts.Ifthere

are pay rises, we must have the

capacity to pass costs onto the

consumer or there must be an

increaseinproductivity.Currently

the lack of focus on productivity is

concerning,aswithproductivity

rises come pay rises.

The other issue that is connect-

ed to the pay rise is the two-tiered

workplace relations system.

Currently, the likes of Wool-

worths and McDonalds pay low-

er penalty rates on Sunday due

to deals negotiated by the Shop,

Distributive and Allied Employees

Association (also known as “the

Shoppies”).Thismeansthat,

with the latest rise, a small busi-

nessownerwillpay$64morein

wagestoanemployeeforasev-

en-hour shift on a Sunday than

Woolworths and many other

large businesses.

So we need a productivity

return on pay rises and we need

afairerworkplace relations

system.

PETER STRONG

CouncilofSmall Business

Australia

YES NO

Is the minimum wage

increase good for

the economy?

THE DEBATE

WHAT

YOU NEED

TO KNOW

TheFairWorkCommission

recently announced that Australian

minimumwageswouldbeincreased

by 3.3% from the first full pay period

starting on or after July 1. The

national minimum wage will

rise by $22.20 to $694.90

a week.