In a submission to the Fair Work Commission, Workplace Relations Minister Amanda Rishworth said the government wants an "economically sustainable real wage increase" for minimum wage and award-reliant workers, a group that includes about one in four employees nationwide.
This marks a subtle but important shift. The government argues "Labor believes workers should get ahead with a real wage increase." It points to economic improvement: "Inflation is now less than one third of its peak, unemployment remains low, there are over 1 million additional people employed than in May 2022, and interest rates have started to come down." These economic credentials form the government's case that wages can safely rise faster than inflation without triggering a wage-price spiral.
Women are disproportionately represented in jobs under awards and low paid. If the government's recommendation is accepted, it will help about three million workers, including cleaners, retail workers and early childhood educators. The human stakes are clear: these are the workers most exposed to cost-of-living shocks.
Yet the government has been careful to pitch its argument as economically prudent rather than politically ambitious. The submission says a rise in minimum and award wages should be consistent with inflation returning sustainably to the Reserve Bank's target band of 2% to 3%. This framing attempts to stake middle ground: yes to real wage growth, but only to the extent the RBA's monetary policy targets allow. The government is not backing the broader wage increases unions seek.
The business community sees it differently. Employer groups have warned that such a move could fuel inflation further, given global energy price volatility and lingering economic uncertainty. With petrol prices rising due to Middle East tensions, this is not an abstract concern. There is a genuine tension here: can low-paid workers afford another year of stagnant real wages, or can the economy afford faster wage growth? The Fair Work Commission must weigh both.
Treasurer Jim Chalmers acknowledged employer concerns but said the government's focus remains on "helping with the cost of living in responsible ways", pointing to tax cuts and cheaper medicines as part of a plan to balance wage growth with inflation control. "Workers are doing it tough right now and that's why we think they should get a sustainable real wage increase," he said.
The Fair Work Commission will weigh the government's proposal alongside union and employer submissions before announcing its decision later this year in July. The last time the Commission delivered a substantial real wage increase was in 2024, when it granted 3.5%, well below the inflation peak. If it agrees with Labor's submission this time, award-reliant workers will finally get relief. If it sides with caution, another year of real wage erosion waits.