Wage increase won’t threaten economy: ACTU

Dominica Sanda and Rebecca Gredley
(Australian Associated Press)


Union boss Michele O’Neil is calling for a six per cent increase to the minimum wage, telling the industrial umpire it won’t threaten Australia’s economic growth.

The Australian Council of Trade Unions president argued for the increase – of about $43 more a week – to a Fair Work Commission hearing in Sydney on Wednesday.

Ms O’Neil is the first ACTU president to argue the case since Bob Hawke in the 1970s.

She said a “modest” six per cent rise will affect more than two million people.

“The increase is within the band of increases that doesn’t constitute a threat to economic growth,” Ms O’Neil told the commission.

She argued wealth and income are not being shared in Australia and while the economy is growing, wages haven’t kept up.

“A trickle-down market approach simply isn’t capable of delivering fair minimum wages or a fair and relevant safety net, let alone supporting the normal needs of a human being living in one of the richest countries on earth,” she said.

Ms O’Neil argued that by not raising the minimum wage the commission would be accepting a “low road” of low living standards in Australia.

Near-zero real wage increases result in an entrenched working poor, high inequality and social divisiveness, she said.

Ms O’Neil pointed to a range of statistics to support the ACTU’s case, including that one contributor to recent lower levels of economic growth has been a decline in growth of household consumption.

The review comes as Labor pledges to immediately scrap the coalition’s submission to the annual wage review and ask the industrial empire to raise award wages.

If elected on Saturday, Labor would also ask the commission to examine the idea of a “living wage”.

But business groups say a hike of six per cent would destroy jobs and threaten economic growth.

The Australian Industry Group on Wednesday argued for a minimum wage increase of two per cent this year, marking a rise of about $14.40 per week to the current level of $719.20.

AI Group chief economist Julie Toth said there has been a drop in business conditions as a result of a downturn in the housing market.

It comes as Business Council of Australia head Jennifer Westacott is eager for her organisation to work with the ACTU and the next government to reform the enterprise bargaining system.

“None of us can do this without each other. Business is vital to this, they (the ACTU) are vital to this, whoever forms government is vital to this,” she told ABC Radio National on Wednesday.

“We have got to go back to a kind of working together, getting the evidence on the table about what’s working, what’s not, what’s actually happening in the labour market and make sure we fix those problems together.”


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