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Employers urge limits on unfunded award wage rises

By: Brett Hogan, ACCI Director of Communications
22 March, 2010

The Australian Chamber of Commerce and Industry (ACCI) will support conditional increases of between $10.50 and $12.50 per week to award wages in the Annual Minimum Wage Review.

But given the uneven nature of the recovery and the higher labour costs some employers are already facing as a result of transitioning to the new industrial relations awards, ACCI will also propose that during 2010 employers in specific industries or regions be allowed to seek special relief from arbitrated wage increases.

"This is not an employer position designed to play a game of ambit against the ACTU's push for a $27 rise, nor a case where a midpoint between a moderate industry position and an irresponsible union claim would be the right decision," said David Gregory, Director of Workplace Policy. "Limiting increases to between $10.50 and $12.50 holds the best chance of making sure that wage rises do not come at the expense of jobs, or stall the recovery before it takes firm hold in small business.

"Many of the small and medium businesses that have to pay these arbitrated wage rises face similar struggles to wage and salaried households, such as four interest rate rises in six months, a lack of access to capital, sluggish service industry demand and going deeper into debt to fund higher costs.

"The 2010 wage case is complicated by the fact that employers in key industries and regions face higher labour costs from 1 July because of the amalgamation of awards into fewer numbers. Unless these employers get relief they will face a double whammy on 1 July, with award wage rises on top of unexpected hikes in penalty rates, allowances and overtime."

The union claim extends well beyond the lower paid, and reaches into all award rates including some professionals paid above $100,000 per year.

"Especially when it comes to mid and higher range award rates, arbitrated increases must leave room for productivity bargaining. Not one cent of these arbitrated award wage rises is traded off against productivity changes, and that is why they are unfunded and risky to jobs,” explained Gregory. 

"Our position is that no more than $12.50 rises should apply to award wages from the minimum wage up to the tradesperson's award rate, and $10.50 rises above that – with scope for employers facing the July 1 double whammy to seek relief from these dollar amounts or the timing of rises."

ACCI's submissions will be available at www.acci.asn.au once lodged with Fair Work Australia after 5pm on Friday 19 March.

Source: Australian Chamber of Commerce and Industry

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