Greens Push Labor on Whether New $1,000 per Week Minimum Wage Is Enough

Labor Minister Murray Watt and Greens Senator Barbara Pocock have failed to see eye-to-eye over the Fair Work Commission’s (FWC) 4.75 percent increase to Australia’s minimum wage.

The increase means a minimum wage job in Australia will pay just over $1,000 a week.

Pocock queried the rise during an Education and Employment Legislation Committee hearing during Senate Estimates on the evening of June 2.

The figure falls between the amounts sought by employers and unions, and falls just short of the federal government’s call for the increase to be above the rate of inflation, which the International Monetary Fund has warned is on track to be one of the highest in the developed world.

Some stakeholders, such as the Australian Council of Trade Unions, had called for a rise as high as 5 percent.

During the estimates hearing, Pocock said the Reserve Bank Australia was predicting inflation to reach 4.8 percent.

“We know that the purchasing purchasing power of real wages is a long way short of where it needs to be, where we’re at 2011 levels of purchasing power and real wage levels,” she said.

“What’s your response to this view that today’s decision doesn’t help those workers who’ve lost real purchasing power to catch up?”

Minister Watt said his government welcomed the FWC decision.

“As a government, we obviously advocated for an economically sustainable real wage increase, and that’s what the commission has delivered, and of course, the lowest paid workers in our community are those that need wage rises the most,” he said.

But Pocock argued the rise wouldn’t keep up with the increase of other living costs.

“If we look at what the commission says about who these battlers [on minimum wage] are, the people who are really desperate for a pay rise—over 60 percent women, 70 percent part-time, more than half casual, more than a third are low paid, and they are disproportionately renters, and we know that rent rises over the last five years have been at two-and-a-half times the rate of real wage increases of nominal wage increases,” she said, adding that rents had increased 6 percent in 12 months.

Watt noted that rents and housing prices in Australia were “rapidly spiralling.”

“I guess what I’d say is that the government is attempting to assist those in our community who most need assistance, including renters, through a range of ways, by putting in place workplace reforms that are delivering higher wages, by advocating economically sustainable real wage increases to the minimum wage, by significantly lifting rent assistance …” the senator said.

“One of the key reasons behind the tax reforms that we proposed in this year’s federal budget is to assist more Australians, in particular younger people, get into the housing market,” he said.

Pocock argued the increase would not get Australians back to where they were a decade ago and that within 12 months, minimum income earners’ wages would be moving backwards.

“As I say, that wage rise that has been decided upon today by the Fair Work Commission is ahead of the most recent inflation rates, and it’s ahead of the forecast for inflation over the next four months,” Watt said.

There was then a very brief exchange in the hearing between Watt and Deputy Liberal Leader Jane Hume after Watt blamed stagnating wages on the Coalition, a statement Hume denied.

The FWC wage increase will affect around 100,000 of the lowest-paid employees.