The national employer Association Ai Group has lodged its reply submission to the Fair Work Commission in the Annual Wage Review 2025.
The Expert Panel should take a cautious and considered approach to adopt a rise of not more than 2.6%, reflecting the challenging economic situation facing Australia and the world.
Our economy is in a fragile position, coming out of the weakest year of growth in three decades. Private sector output, employment, investment and financial performance have deteriorated, while the economy has become reliant on government spending to prop up performance. Productivity has unfortunately continued to slide and remains well below long-term trend.
The recent announcement of wide-ranging tariffs by the US government introduces a considerable degree of uncertainty to Australia's economic outlook. They will have complex, volatile and differential effects on industries, inflation, employment and more for our highly trade-exposed economy. Expectations for future economic performance should be lowered as a result.
In this context, the ACTU's claim for a 4.5% increase in minimum and award wages is reckless. It will exceed business capacity to pay, risking disemployment in a private sector labour market which is already showing signs of weakness.
When considered in the broader context of the deteriorating and uncertain global environment that will drag on growth, it is unsustainable to award an increase of such a quantum.
In recent years, the Expert Panel has adopted an approach that real minimum and award wages should grow in line with trend productivity over the medium to long term, while recognising the need for short-term flexibility. The ACTU's 4.5% claim ignores the need for balance and pushes for an increase disconnected from our economic and productivity conditions.
Ai Group's above-inflation recommendation of 2.6% will ensure a responsible increase in real minimum and award wages that will minimise adverse employment consequences for businesses and workers alike.
Download Ai Group's reply submission here
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