Fair Work Commission to boost Australian minimum wage
Sydney (2 June)
The Fair Work Commission (FWC) will increase Australia’s national minimum wage (NMW) and minimum award wage rates by 6% and 4.75%, respectively, to at least A$26.44 per hour for ongoing staff, from 1 July.
Around 2.8 million workers rely on award-based wages, the FWC said on 2 June. They will be no worse off than they were on 1 July 2025, it added.
The FWC’s minimum award wage increase is unlikely to affect the competitiveness of the Australian economy because the sectors most impacted by it are not, for the most part, trade-exposed, the agency said. But it will increase employment costs for some businesses, it added.
The FWC does not expect the NMW wage increase to have any discernible macroeconomic effect because of the low share of workers on it.
Australia’s government estimates that 23,900 workers earn within A$0.25 per hour of the NMW, it told the FWC during the agency’s 2025 Wage Review. But the FWC rejects the Government’s findings.
“The number of NMW-reliant employees, and their proportion of the workforce, are likely to be only a fraction of the Australian Government’s estimates,” the FWC said in its 2026-27 Wage Review decision.
The Australian Government likely overestimates the number of NMW-reliant workers in Australia by failing to account for industry and occupation-specific minimum wages, the FWC found in 2023.
Australia’s annual inflation rate stood at 4.2% in April, below the FWC’s minimum wage growth rates, data from the Australian Bureau of Statistics (ABS) show. But the Reserve Bank of Australia (RBA) expects annual consumer inflation to peak at 4.8% in June 2026, under its baseline economic forecast, it said on 5 May.
The Australian Council of Trade Unions (ACTU) has backed the FWC’s decision. “The pay boost … benefits all working Australians by lifting the national minimum wage floor that unions bargain from,” it said.
“[FWC’s decision] means relief is on the way for lower-paid workers to help keep up with price pressures and avoid the need to cut back on essentials like food or seeing a doctor,” ACTU Secretary Sally McManus said.
The Australian Chamber of Commerce and Industry (ACCI) has warned that the FWC’s decision will detract from the ability of businesses to do business, ACCI Chief of Policy David Alexander told reporters.
“It’s going to hit small [businesses] the hardest because they disproportionately employ people on the minimum wage… [There are] particular industries as well, such as retail, hospitality, restaurants, cafes, accommodation [that will be impacted],” Alexander told Brisbane radio station 4BC.
By Avinash Govind