Wage hike costs jobs: AIG

Employers’ group warns on threat to prosperity

BUSINESSES would be worse off and jobs would be lost if the minimum wage was hiked up as much as unions want, a peak body representing Australian employers has warned.

The Australian Industry Group has expressed the sentiment in a fresh submission to the Fair Work Commission’s annual minimum wage review.

In its original submission to the review, the business group argued the minimum wage should be lifted by 2 per cent this year, marking an increase of about $14.40 a week to the current level of $719.20.

The modest increase is necessary because the economy has moved into the “slow lane” and businesses are struggling to cope, it said.

The Australian Council of Trade Unions called in its submission for an increase of 6 per cent, equivalent to a weekly increase of $43.

ACTU secretary Sally McManus (pictured) said the significant spike was needed to ensure that no full-time worker was living in poverty.

In a reply published yesterday, the AI Group says what the unions want is “obviously unsustainable”.

“A minimum wage increase of this magnitude would be a certain way to destroy jobs, harm businesses and threaten Australia’s long period of economic growth,” the document reads.

This month’s federal Budget acknowledged that Australia’s economy is slowing by revising down forecasts for growth, it noted. The AI Group says the Budget also promised an increase to a tax offset for low and middle income earners, which will increase the disposable income of people earning the current minimum wage.

It said businesses were struggling to cope with high and rising input costs, especially energy costs, and productivity was weak in industries with mainly lowwage employees.

The group also argues that inflation remains weak, meaning that even a small rise in the minimum wage would deliver a real increase in household spending power.

The discussion comes after federal Labor last month urged the industrial umpire to lift the minimum wage but wouldn’t nominate a figure.

That prompted grave warnings from the Coalition about job losses and real economic damage.