Minimum award earners to get 4.75 per cent pay rise, Fair Work Commission rules

Millions of Australians will get a pay rise within weeks after the Fair Work Commission approved an increase to the minimum wage.

Minimum award workers will get a pay boost of 4.75 per cent.

The change will affect 2.8 million people whose pay is set by a modern award, or about 20 per cent of the workforce.

The commission also delivered an increase to the minimum wage, which will rise to $26.44 per hour (from $24.95), or $1004.90 per week (from $948).

The minimum wage applies to workers not covered by a modern award or an enterprise agreement.

The changes will come into effect on July 1.

This year’s ruling was “particularly challenging because of the unusual degree of complexity” in the Australian economy, Fair Work Commission president Adam Hatcher said.

The outbreak of war in the Middle East and its subsequent pressure on inflation was a key issue, which Mr Hatcher described as a “wildcard”.

The Coalition has backed the pay rise but blamed the necessity of a wage increase on inflationary government spending.

“There is little comfort in a wage increase if Labor’s inflation simply eats it away,” deputy Opposition Leader Jane Hume said in a statement. “The best way to improve living standards for all Australians is to get inflation down, lift productivity and support businesses to grow and employ more Australians.”

Inflation is currently 4.2 per, above the target range of 2-3 per cent.

The Commission is independent of the federal government, from which it receives submissions on any changes to the minimum wage.

The Albanese government previously backed a “sustainable” minimum wage increase but did not commit to a specific number.

The Australian Council of Trade Unions (ACTU) had asked the Commission for a six per cent pay rise for three million award wage workers last month, while the Australian Chamber of Commerce and Industry requested a “moderate increase of 3.5 per cent”.

More to come