On May 19, 2010, the Australian government made a submission to the Fair Work Australia 2010 Annual Wage Review for raise in minimum wages for low income workers. It is expected that the increase will come into effect on Thursday 1 July. Around 1.4 million employees will benefit from this increase.
Australian wages in the first quarter of 2010 grew at the fastest rate for more than a year, an indication of Australia’s robust economy.
The increase has prompted the Reserve Bank of Australia to embark on an aggressive round of interest rate increases to prevent inflation climbing beyond 2 percent to 3 percent, which is their target range.
Furthermore, Bill Evans, chief economist at Westpac Banking Corp. in Sydney stated, “The turn in annual wage inflation with a further acceleration to come through 2010 reinforces the already building inflation risks for 2011”.
The Australian Council of Trade Union (ACTU) said that the forecasts of strong GDP and jobs intensification over the next two years will revitalise the Australian economy and this makes a strong case in support of the proposed raise in the minimum wage.
In a survey, 78% of Australian businesses were looking to increase wages either in line with inflation or higher. In the last year 36% of Australian companies increased staff, 27% decreased and 17% stayed the same, another indication of the robustness of the Australian economy. Vacancies for skilled workers have grown for 11 consecutive months now.
Prime Minister Kevin Rudd said that his government supports a “catch- up” increase in the minimum wage as the economy improves.
