‘Hard reality’ of minimum wage increase

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Business Council of Australia CEO Jennifer Westacott says Australia’s boosted minimum wage is “pretty high” compared to other countries but cautions that there is a “hard reality” that comes with it.

The Fair Work Commission this week announced an $18.80 a week minimum wage increase which will see the new base rate of pay at $20.33 an hour or about $770 a week – equating to more than $40,000 a year.

“It’s a pretty high minimum wage relative to other countries,” Ms Westacott told Sky News Australia.

“The commission has kind of delayed it for some of those sectors that are still at risk.

“But for small business in some of those sectors at risk, and it’s a big impost, and if money is not coming in the door and you’re putting people’s wages up there’s only one choice for you – employ less people.

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“That’s the hard reality of these things.

“I thought the commission made a careful decision, I thought their decision to delay things was right, of course we want to see people get higher wages, but you’ve got to be careful that you’re not adding risk.

“We’re not sure what’s around the corner at the moment, and some of these sectors are still – they’re just getting back on their feet and they’ve got to be able to get that momentum and be able to sustain those wage increases, to sustain their business getting back on their feet.

“It puts a risk, particularly for mid-sized small businesses.”


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