Sustainable wage growth needed in the long term

02 June 2023

We acknowledge today’s decision by the Fair Work Commission to increase the minimum wage by 5.75 per cent as many Australians are doing it tough, Business Council chief executive Jennifer Westacott said.

“Increasing wages for low paid workers is needed given the higher cost of living, but unless we are willing to do the hard yards now to speed up economic growth and drive productivity, we run the risk of more persistent inflation and higher unemployment in the long term.

“This comes at a time when we are experiencing a sharp slowdown in growth in the economy.

“We know that a functioning enterprise bargaining system is key to lifting productivity and is a sustainable way of delivering long term wages growth.

“We must continue to build off the hard-fought for changes made to the Better Off Overall Test, which has enabled more employers to share the dividends of better performing workplaces with their teams through higher wages and better conditions.

“We should not do anything now to stifle productivity, innovation and flexibility in the economy.

“That will simply result in higher unemployment, increased costs to consumers and more persistent inflation, which would risk interest rates staying higher for longer. This would hurt most the very people the Commission is trying to help.

“That would be an own goal for the country and an own goal for workers because jobs will go elsewhere.

“We urge the government to carefully reconsider their proposed workplace relations changes to minimise the risk of adding more rigidity and complexity in the system.

“As currently proposed, productivity will be further undermined by these changes which will put additional pressure on jobs and risk employers being able to provide sustainable higher wages.

“The more we are not allowing the economy to innovate, the slower the rate of growth will be.

“That will be a recipe for unemployment, slower wages growth and lower living standards in the long term.

“We need to be clear about the problem we are trying to solve, rather than adding more complexity and rigidity to the system that will ultimately stifle sustainable wage growth for Australians.”


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