"Australian Industry Group will propose a 3.9% increase to the minimum wage in recognition of the deeply uncertain circumstances confronting our economy. Given we are facing into recessionary conditions, to grant more would cause significant damage to both business and workers," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"The global oil shock has materially damaged business confidence and certainty. Its impacts are far from over and are likely to worsen in the months ahead as inflation and supply disruption take hold. This demands that the Fair Work Commission's Expert Panel take a cautious and risk-sensitive approach in setting the minimum and award wages this year.
"Employers are already feeling the impacts of surging prices for fuel, fertiliser, plastics and other industrial commodities which are altering business conditions and settings. This is coupled with significant increases in insurances, rents and capital equipment.
"These cost increases should loom large in the considerations of the Expert Panel. Businesses simply do not have an endless capacity to absorb costs – including wage increases – without passing them on to consumers or fundamentally changing how they work, including the composition of their workforce.
"It is also increasingly clear the Australian economy will weaken materially over the coming year, with uncertainty only over to what degree, and how long it will take for energy markets to stabilise and growth to recover. This in reflected in the cuts to economic growth projected in this week's budget.
"In this context, the ACTU's revised claim for a 6% increase in minimum and award wages is ludicrous. It is significantly higher than expected inflation, and risks disemployment by driving higher wage costs into businesses already under strain from the crisis.
"We acknowledge the cost of living pressures currently bearing on households due to the inflation spike catalysed by the crisis. However, lifting wages to match what is expected to be a temporary inflation spike will exacerbate the long-term negative effects on an already weakening economy.
"Australian Industry Group proposes a 3.9% increase in minimum and award wages this year. This proposal recognises changes in tax settings in the budget which will flow through to wage earners. This proposed increase would responsibly balance the need to address the inflationary pressure caused by the energy crisis, while also recognising its serious consequences for business and the economy," Mr Willox said.
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