Millions of workers in Australia to receive 4.75 per cent pay rise from July 1 | ABC NEWS

Añadido: 2026-06-02

[00:00:00]Every year, the Fair Work Commission releases its annual wage review, and today it has done just that. And as you say, the modern award rates are going to increase by 4.75% for 2.8 million workers from the 1st of July. The annual wage review found that it was going to increase wages for those at the very bottom by a third on top of that. So, essentially, the minimum wage will it increase by almost 6%. So, minimum wage workers will see their hourly rate go from $24.95 to $26.44, and that will take their wages weekly up from $948 a week to $1,004 or so. Now, that's going to affect around 100,000 workers across Australia from July 1. The commission did consider the need to restore the real wage cuts that were experienced by many after the big spike in inflation that we got after the COVID pandemic, but it's also balancing that with the uncertainty in the economy currently due to the Middle East conflict and the outlook there and how it's going to play out. I mean, we already have an inflationary situation in Australia. We've had three interest rate increases, and the commission did reference those when deciding on these numbers, saying that perhaps that we're going to see that sort of start to take the inflation inflationary pressures out. It also considered gender inequality when it comes to the professions that are covered by these awards, which are heavily female-dominated, and it wanted to ensure that there was some equality restored there, and those professions are seeing appropriate pay for the work that's being done. Now, unions wanted a 6% increase for the modern award rates.

[00:02:03]When it comes to business, they really wanted it capped at 3.9%.

[00:02:08]So, the commissioner certainly landed closer sort of to the unions, I guess you could argue, particularly when it comes to that minimum award than the business groups. But, it has weighed up, as I said, those inflationary impacts in the economy as well as the outlook economy given the uncertainty geopolitically. Now, it is worth noting, Gemma, that the current rate of inflation, as recorded by the Bureau of Statistics, is 4.2%.

[00:02:36]So, this is running ahead of inflation, but the RBA is expecting that in the June quarter, which we're currently in, inflation could hit about inflation to be about 5% mid-year. So, you can kind of say that the Fair Work Commission has, perhaps, landed just below those forecasts when it comes to the inflationary outlook with this 4.75% number.

[00:03:04]So, if we look at the inflationary impact, one economist that the ABC has recently spoken to, as this was handed down, said, "Given those forecasts, the outlook for inflation, given this wage increase, is not too great, given it's pretty much in line with the RBA's expectations as well as Treasury's expectations. So, it would add about 0.2 percentage points to the CPI if you just assume no changes in profits or productivity."

[00:03:38]And, he has also noted that wages of award-reliant employees only account for 11% of the national wages bill. And, when it comes to the minimum wage workers, as I said, around 100,000. So, it According to this economist, he doesn't believe that it will be inflationary.

[00:04:01]But, in terms of how this is going to be debated, and this is David Peetz from the employment relations at Future Work, in terms of the economic debate and the political debate around these wage rises as well as the reaction from unions and business, you can imagine that the inflation outlook will certainly feature in the reaction to this decision. And I repeat, the minimum wage has been raised by about 6% taking the annual pay packet of around 100,000 minimum wage earners to a $1,004 a week. As for those on the modern award wage, around 2.8 million Australians, they will get a wage rise of 4.75% from July 1, Gemma.

[00:04:49]>> Alicia, thank you.

[00:05:10]>> Okay.