Australia’s industrial umpire has been asked to consider upcoming federal government tax cuts when it decides on the next annual pay rise for low-paid workers.

The Australian Retailers Association, representing more than 120,000 retail shop fronts and online stores, proposes the Fair Work Commission implement an “equitable” 3.1 per cent rise in the minimum wage.

“This increase in wages should be based on the underlying rate of inflation at the time the FWC hands down its decision … less the impact of increases in superannuation,” the association said in a submission to the commission’s annual wage review.

“We also believe that this year’s increase should be considerate of the impact of the stage three tax cuts.”

Stage three cuts have been on the table since the coalition was last in power and have been validated by the current Labor government, with some changes.

Under Treasurer Jim Chalmers, every Australian taxpayer will get a reduction, albeit skewed to those on lower incomes.

People earning less than $150,000 will get a larger cut than was promised in 2018, while those earning more than $150,000 will get a bit less.

The government has already argued that the tax cuts shouldn’t substitute for any part of a “much-needed” pay boost for low-paid workers.

The independent workplace relations umpire began its annual review of minimum wages and awards last week and is taking feedback from employers, unions and governments.

The rise is set to come into effect on July 1.

Last year, the workplace umpire lifted wages by 5.75 per cent for more than 2.5 million workers, citing low unemployment, falling wages and high inflation.

While quarterly inflation remains above the preferred two-three per cent target range, it has moderated to around four per cent since peaking at 7.8 per cent in late 2022.

Given the progress on inflation and sizeable minimum wage bumps in previous years, the Australian Chamber of Commerce and Industry wants the commission to stick with a pay rise of no more than two per cent.

Fellow business lobby Australian Industry Group proposes no more than 2.8 per cent.

Peak union group the ACTU wants a five per cent pay bump across awards and minimum rates.

But that doesn’t wash with Laundry Association Australia (LAA), representing laundromats and big commercial laundry operators processing the equivalent of 200,000 towels – or 100 tonnes of washing – a day.

These businesses have been exposed to sharp rises in energy costs that have to be passed on to consumers, chief executive Luke Simpkins said in its submission to the review.

“The Australian laundry sector has not benefited from any government support with regard to our costs or any positive impacts on our business operating environment,” he said.

“The view of the LAA is that with increased productivity, increased pay will be provided.

“However we oppose any increase to the minimum wage and award, until the government properly addresses the other costs that face our industry.”

The commission will likely hand down its decision in early June.

 

(Australian Associated Press)