Economy, Industrial Relations

Fair Work Commission decides on 3.3% increase to minimum wage

Emma Koehn /

The full bench of the Fair Work Commission has handed down its decision on an annual increase to the minimum wage, deciding on a 3.3% increase to minimum pay packets from July 1.

Explaining the decision this morning, Fair Work Commission president Justice Iain Ross said the Commission had taken into account both economic and social conditions, in line with the full bench’s mandate.

He highlighted that profit growth in 2016 was particularly strong across all sectors compared with the five- and 10-year average, while labour productivity figures “rose sharply” in 2016.

It provides an opportunity to improve the relative living standards of low wages,” he said of the broader conditions. 

From July 1, 2017, employees are entitled to a minimum take-home weekly pay of $694.90 per week, or $18.29 an hour. This is a $22.20 increase. Modern award wages will also be increased by 3.3% and weekly wages for awards will be rounded to the nearest 10c.

The latest increase compares to a 2.4% increase last year, when the Commission decided to increase the minimum wage to $17.70 an hour.

Ross said, having reflected on the research about the impact of minimum wage increases on disincentives to employ people, all signs pointed to the idea that regular, modest increases in wages would benefit the overall economy.

While some industry groups had lobbied for the increase to be as low as 1.2% this year, Ross said when reviewing research about wage increases out of the UK, it raised the possibility that the Commission had been too cautious in the past when making decisions on minimum entitlements.

“That research also suggests that the panel’s past assessment of what constitutes a ‘modest’ increase may have been overly cautious, in terms of its assessed disemployment effects,” he said.

The changes will come into effect from July 1, 2017.

Read the commission’s full decision here.

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Emma Koehn

Emma Koehn is a former senior SmartCompany journalist.