Labor will urge Fair Work Commission to give real wage rise to three million workers

The Labor party on Wednesday will urge the Fair Work Commission to grant a real wage increase to Australian workers on awards.

This goes further than Labor’s recommendations in earlier years, which have been for real wages not to go backwards.

In the new submission, Labor will say that the increase should be “economically sustainable.” It says a rise in minimum and award wages should be consistent with inflation returning sustainably to the Reserve Bank’s target band of 2% to 3%.

The move sets up a debate between the government and opposition about what are responsible wage increases.

The submission says: “Labor believes workers should get ahead with a real wage increase. Despite heightened global uncertainty and volatility, the Australian economy has turned a corner. Inflation is now less than one third of its peak, unemployment remains low, there are over 1 million additional people employed than in May 2022, and interest rates have started to come down.

"Economic growth rebounded at the end of last year and the private sector is now a key contributor to growth. Importantly, real wages growth has now returned and is forecast to continue across 2024-25 and 2025-26. A soft landing in our economy looks more and more likely.”

More than 2.9 million workers have their pay set by an award and are directly affected by the commission’s Annual Wage Review. The national minimum wage is presently $24.10 an hour, which is $915.90 for a 38 hour week, equivalent to $47,626.80 a year.

The submission points out that women are disproportionately represented in jobs that are under awards and low paid.

The government argues that its position is both economically responsible and fair, and will ensure low paid workers can get ahead as inflation moderates. It says that if its recommendation is accepted, this will help about three million workers, including cleaners, retail workers and early childhood educators.

Prime Minister Anthony Albanese recalled that during the 2022 campaign he was asked if he supported a wage increase for low paid workers.

After he said “absolutely”, the Liberals had said this would wreck the economy,

“Since then we’ve seen wages going up, inflation coming down and interest rates starting to fall. This campaign will again advocate for workers to get a pay rise to not only help them deal with the pressures of today, but to get ahead in the future.”

Treasurer Jim Chalmers said: “The choice at this election is between a Labor government which has been creating jobs, getting wages moving again, rebuilding living standards and rolling out responsible cost-of-living help versus a Coalition that wants Australians working longer for less.”

In its submission Labor says an economically sustainable real wage increase would complement the measures the government has introduced to ease cost-of-living pressures.

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.