Australia’s Minimum Wage is set to increase by 2.9 percent from July 1, following a decision handed down recently by Fair Work Australia (FWA).
The increase will see minimum hourly wage increase by 45c to $15.96 (full time rate, an increase from last year’s $15.51) and the weekly wage to $606.40 (an increase from $589.30).
At $17 per week, the increase is more than the recommendation proposed by the National Farmers Federation’s submission to FWA, which was at $10 per week.
The NFF suggested that the FWA panel find the right balance between the financial need of the lower-paid worker and consider the potential impact on employment growth within the agriculture sector.
Hence, NFF’s minimum wage proposal reflected the changes in costs of living as well as other changes in the economic environment such as employment, wages growth, inflation and productivity outcomes.
NFF proposed that pay equity considerations are best addressed through means other than general minimum wage rulings.
The NFF also said that while the underlying strength and resilience of the Australian economy and labour market over the last year had been encouraging, a number of future economic indicators suggested that agriculture might be subjected to reduced commodity prices across all sectors.
This, combined with recent severe weather and costs associated to it, meant agriculture in regional and rural Australia would be faced with a considerable rebuild phase and a period of uncertainty going forward.
At the time when the NFF submission to the FWA was published late last year, the sector had suffered livestock and crop losses due to severe flooding in Queensland, New South Wales and Northern Victoria.
Hence the proposed $10 per week increase is what NFF considered to be a sufficient level to encourage labour force participation.
This moderate increase is fair and at the same time will not hinder the agricultural sector as it continues to face future challenges which may affect profitability.
An interesting fact from a few years ago – in 2007, drought-stricken farmers were exempted from paying the new minimum wage levels for 12 months. A historic decision by the FWA, it recognised the hardship that was being experienced in the agricultural sector.
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