Australian business push to cut minimum wage

Workers looking for a pay rise should not expect any support from their employers.

In a controversial move, the National Retail Association and Catering Industry Association of Australia have called on the Fair Work Commission to keep the minimum wage flat at $18.29.

While both groups represent two industries – retail and hospitality – that often pay no more than the minimum wage, their submission puts them at odds with the wider business community with most business groups acknowledging that a minimum wage rise is needed to keep pace with inflation, now at 1.9 per cent. People on a minimum wage would in effect take a pay cut if inflation stays at 1.9 per cent.

The Fair Work Commission published 15 submissions to its annual minimum wage review on Tuesday and 11 of them were from industry groups.

Four employer groups – including the Australian Chamber of Commerce and Industry, the peak body for Australian business overall and the Australian Retailers Association, which has a similar membership to the National Retail Association - called for a rise of “no more” than 1.9 per cent.

The Masters Grocers Association, representing food retailers, called for below-inflation pay rise of 1.1 per cent.  This would be a pay cut in real terms.

In its submission, the Restaurant and Catering Industry said raising the minimum wage would make it difficult to hire people on a full-time basis, arguing that last year’s increase of 3.3 per cent was “higher than necessary”.

Increasing the minimum wage, it said, would hurt profits.

“RCI argues that another significant increase in the minimum wage will adversely affect the ability of businesses within the café, restaurant and catering sector to operate profitably.”

At the other end of the scale, the Australian Council of Trade Unions called for an increase of 7.2 per cent. That is almost three times inflation.

Leon Getler 14th March.