Australia’s independent wage-setting body raises the national minimum wage by 3.5% effective July 1, providing a real wage increase for about 2.6 million workers on the lowest pay as inflationary pressures ease.
The minimum rate rises to A$24.94 ($16.19) per hour, resulting in an extra A$1,670 annually for full-time employees, according to the Fair Work Commission’s annual review. Headline consumer price inflation holds steady at 2.4% in the first quarter, comfortably within the Reserve Bank of Australia’s target band of 2% to 3%, down from a 7.8% peak in late 2022.
Fair Work Commission President Adam Hatcher says the decision could help many workers recoup the loss of real income over the last few years caused by high living costs. He warns that without this wage increase, a permanent loss in the real value of wages would become embedded, reducing living standards for the lowest paid.
Last year, the commission raised minimum wages by 3.75%, largely in line with inflation. The Australian Council of Trade Unions calls the increase “a great outcome” for employees on minimum wages, who suffered the most when inflation surged after the COVID-19 pandemic.
The Reserve Bank of Australia cut interest rates to a two-year low last month as cooling inflation at home offered room to counter rising global trade risks, leaving the door open for further easing. Meanwhile, the labour market remains resilient, with the jobless rate steady at 4.1% for over a year.
Employment gains are driven by a surge in public sector jobs, while modest wage growth suggests little risk of a damaging wage-price spiral.
