Employer group says 2.5% wage increase sufficient

The Ai Group is calling for a 2.5 per cent increase stating in its submission that the government has not convinced it that a higher increase will be of benefit.

“This equates to an increase of about $19.30 per week in the National Minimum Wage (bringing it to $791.90 per week) and about $22.50 at the base trade level,” chief executive, Innes Willox said in the submission.

“Ai Group’s proposal would result in the equivalent of a 4.3 per cent increase in pre-tax remuneration for low paid employees. This figure takes into account our proposed 2.5 per cent wage increase plus the 0.5 per cent Superannuation Guarantee increase that is operative from 1 July 2022 and the equivalent of a 1.3 per cent increase in pre-tax income that an employee on the National Minimum Wage will receive in coming months as a result of the legislated increase in the Low and Middle Income Tax Offset (LMITO).”

The submission refuted the government’s recommendation that a higher increase is necessary to “ensure that the real wages of Australia’s low-paid workers do not go backwards”.

“There is nothing in the Government’s submission which indicates what it means by the expressions ‘low paid’ and ‘do not go backwards’,” Mr Willox said.

“It appears that the Government’s use of the expression ‘low paid’ is intended to refer only to employees at the lower levels of award classification structures.

“With regard to the comment that employees should ‘not go backwards’, it should be noted that the Government has not urged the Panel to depart from its longstanding approach of taking into account changes to taxation levels and transfer payments. As such, and as argued by Ai Group, the Panel should take into account the 0.5 per cent Superannuation Guarantee increase and the equivalent of a 1.3 per cent increase in pre-tax income that an employee on the National Minimum will receive from the LMITO.

“To the extent that the Australian Government is urging the Panel to award a different level of wage increase to employees earning the National Minimum Wage or classified at lower levels in award classification structures, we do not support this approach. The same percentage increase should apply to all classification levels. Also, we do not support the awarding of a flat dollar increase. Such approaches would disturb the relativities between classification levels and make the assessment of work value far more complicated.”