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Ai Group argues for minimum wages freeze at today's final hearing in Annual Wage Review

"At today’s final hearing in the Annual Wage Review, Ai Group will argue that the Fair Work Commission should not award a minimum wage increase given the major impacts of the COVID-19 pandemic on the economy and businesses," Innes Willox, the Chief Executive of the national employer association Ai Group, said today.

"A minimum wage increase at the current time would be harmful to the economy, to businesses, to employees (many of whom would face heightened risks of less secure jobs and fewer working hours) and to the unemployed.

"If, despite Ai Group's submissions, the Commission decides that a wage increase is warranted, Ai Group will argue that the increase should not be operative before 1 January 2021. The priority at this time needs to be on preserving jobs and encouraging, not deterring, employers from taking on more employees and allocating more hours of employment.

"In its submissions to the Fair Work Commission, the ACTU is endeavouring to paint a picture of an economy that is recovering. The reality is that the RBA and Treasury expect the largest impacts from COVID-19 to be evident in the June quarter, when GDP is expected to fall by 8% p.a. If this occurs, it will be more than twice the size of the most severe quarters of shrinkage in either the 1980s or 1990s recessions in Australia.

"Some (but not all) economic indicators improved in May compared with April, but in all cases they remain close to record low levels. The slight improvement is primarily and directly due to unprecedented levels of government financial support in the form of JobKeeper, JobSeeker and other programs for businesses and individuals. The ABS estimates that three quarters of all Australian businesses were receiving some kind of direct Government support by 22 May.

"Much of the crucial Government assistance is due to expire in September. The next few months until September – and then the months after the direct support is withdrawn – will be a difficult period of high risk, uncertainty and anxiety for businesses and households alike. It is essential that actions or decisions that will add to this risk are avoided.

"The Fair Work Act requires the Commission to hand down a decision in the Annual Wage Review by 30 June," Mr Willox said.

Media enquiries: Tony Melville – 0419 190 347