About 3 million workers on minimum wage to receive 4.75% pay rise in Fair Work Commission ruling

Nearly 3 million workers will receive a 4.75% pay rise, while about 100,000 of the country’s lowest paid will receive a higher 6% increase, after the Fair Work Commission handed down its annual minimum wage decision.

Announcing the 4.75% decision on Tuesday morning applicable to the roughly 2.8 million workers on award wages, the Fair Work Commission’s president, Justice Adam Hatcher, announced that the lowest ongoing wage rate for employees would climb from nearly $24.95 an hour, to $26.44 – a lift of just under 6%.

Hatcher said this year’s decision, which applies from 1 July, was “particularly challenging” in the context of surging fuel prices adding to already existing inflationary pressures.

He pointed that falling living standards had hit the lowest paid the hardest, justifying what he called “additional measures” to protect more vulnerable employees.

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The higher increase for the lowest paid reflected a “structural adjustment” to pay classifications, he said.

Unions had demanded a 6% minimum wage increase after last month’s budget projected inflation reaching 5% in the year to June. A peak employers’ association, the Australian Chamber of Commerce and Industry, was calling for a 3.5% increase.

The cost of living has been the No 1 issue weighing on Australian households since inflation tore through the economy in the wake of the Covid-19 lockdowns.

The previous minimum wage increase was 3.5% for 2025-26.

Inflation was 4.2% in the year to April, according to the latest Australian Bureau of Statistics figures, and the budget also predicted consumer price growth could push beyond 5% should the Middle East conflict extend and oil prices climb higher for longer.

With the Reserve Bank warning it may have to hike interest rates further to squash any signs an inflationary mindset has taken hold of the country, Jim Chalmers, the treasurer, has called for a “real” wage increase but added that it also needed to be “sustainable”.