ACTU attacks Federal Government plan to scrap annual minimum wage case

April 12 2005 - Speaking at the start of the 2005 annual minimum wages case before the Australian Industrial Relations Commission in Melbourne, Greg Combet, ACTU Secretary on Minimum wages; Industrial relations reforms & economic issues, said:

"The Government wants to use its Senate majority later this year to change the way minimum wages are set to make them lower. This means that today's minimum wages case could be the last of its kind. This would be a backward step for working Australians. It would threaten the living standards of working families who are already struggling to keep their heads above water.

"Lower minimum wages will mean that Australia becomes more like the United States where the minimum wage is just US$5.15 (AUS$6.66) and has not been raised for eight years. In the US millions of working people live in poverty and I don't think that is the path the Australian public wants our Government to go down.

"In this year's case the ACTU is seeking a $26.60 a week increase in minimum wages to lift the adult minimum wage from $467 a week up to $494. But the Employment Minister Kevin Andrews is on record saying he believes minimum wagesare $70 a week higher than he would like - this would mean a pay cut for minimum wage workers of more than $5,000 a year (see table below).

"In its submission to today's wages case the ACTU will present evidence that a pay rise from $12.30 to $13 an hour is needed by Australia's almost 1.6 million low-paid workers and their families. ACTU evidence will also show this increase is economically responsible and justified by strong productivity & jobs growth in industries in which many minimum wages employees work:

"Overall productivity in Australia in 2003-4 was just over 2% but in the retail sector, the industry with the largest number of people on minimum award wages, productivity growth was close to 7% and has grown by 26% since 1996.

"Overall employment in Australia grew by 13% since 1996 but in industries with a high proportion of minimum wage workers like accommodation, cafe and restaurants, and health and community services, employment grew by more than 30%.

"These productivity and employment gains have occurred in a period where the ACTU has achieved an increase in minimum wages of $118 a week. The facts show that real wage increases for Australia's low paid workers has not cost jobs orstifled productivity.

"There is no justification for the Howard Government's plans to change the way minimum wages are set. It is disgraceful that the Government would try to use its Senate majority to attack the basic rights and living standards of working Australians.

"The ACTU is seeking a guarantee from the Prime Minister that the real value of minimum wages in Australia will be maintained after the Government takes control of the Senate."

Minimum wages Now (April 2005) ACTU claim for 2005 Howard Govt intention

Hourly $12.30 $13.00 $10.45

Weekly $467 $494 $397

Annual $24,370 $25,757 $20,699