Australia lifts minimum wage to match increases in inflation

SYDNEY: Australia’s independent wage-setting body said on Tuesday that the country’s lowest-paid workers will get a 4.75% pay rise from July, roughly in line with an expected rise in inflation projected by the central bank.

It was, however, lower than increases of 5-6% sought by trade unions.

The Fair Work Commission said the minimum wage for a week’s work will rise to A$1,004.90 (US$719), or A$26.44 per hour from July 1, a decision affecting around 3 million workers.

The commission said tighter monetary policy by the Reserve Bank of Australia will “undoubtedly” slow the economy in the year ahead, and noted that inflation has accelerated due to the Iran war disrupting oil supplies.

“Taking into account all of these matters, we have concluded, regrettably, that it would not be practicable or responsible in the current uncertain circumstances to award a real wage increase for employees,” it said.

“However, we consider that we should at least ensure … employees generally are not worse off in real terms than they were as at 1 July 2025 and that we should also take additional measures to protect the position of the very lowest-paid workers,” it added.

Consumer price inflation was 4.1% in the first quarter and is seen peaking at 4.8% in the June quarter, well above the central bank’s 2%–3% target band.

The central bank has raised interest rates three times this year to 4.35%, reversing last year’s easing due to soaring energy prices.

Rate‑sensitive data has shown consumer demand cooling, with April household spending falling, home prices flattening, and unemployment edging higher.

Currently, swap markets imply just a 6% chance of a fourth rate hike from the RBA next month, while pricing in a total of 21 basis points of tightening for this year, equivalent to less than a one-quarter-point increase.

المصدر: Free Malaysia Today