2009 general Wage-Setting Decision

The Australian Fair Pay Commission (AFPC) announced (Tuesday 7^th July 2009) its fourth and final minimum Wage-Setting Decision. This decision apparently intended to protect jobs and to support a stronger recovery in employment as the economy picks up, the Commission decided to leave Australia’s Federal Minimum Wage unchanged at $543.78 per week. The Australian Pay and Classification Scales will also remain unchanged at their present levels throughout 2009.

In its 2009 general Wage-Setting Decision the Commission has decided to:

- maintain the standard Federal Minimum Wage (FMW) at $14.31 per hour ($543.78 per week); and

- maintain the adult rates of pay in Australian Pay and Classification Scales (Pay Scales) at their current levels.

This decision also applies to junior employees, employees to whom training arrangements apply, employees with disability (with the exception of the SWS), casual employees and employees receiving basic piece rates of pay.

In a summary of its’ decision, the AFPC stated…”These are challenging times for the Australian labour market, with unemployment expected to increase significantly in 2009–10.  Caution is therefore warranted in the setting of minimum wages.”

One of the main considerations for the Commission was to have sufficient paid work and good living standards.  “In the current environment, the ability of employers to offer sufficient work has been curtailed and there is a heightened risk that an increase in regulated minimum wages would reduce employment and working hours.  One consequence of increased job losses and fewer hours of work would be significantly lower living standards for many people.”

Other areas of concern include increases to consumer prices; this of course will place increased pressure on [an individuals’] disposable income.  Further, changes to the taxation system coupled with the fiscal stimulus packages have, effectively, provided additional disposable income to cover the average increase in prices for most households, without the risk of increasing unemployment that is associated with higher minimum wages.

The AFPC has decided, following its 2009 Minimum Wage Review that minimum wages will remain at their current levels and not be increased.  In making this decision, the Commission has focused on protecting jobs and supporting a stronger recovery in employment as the economy improves.

This is the final wages review/decision being conducted by the AFPC, hence the next minimum wage review will be conducted by Fair Work Australia.  The Commission considers that, by the next review, the outlook for the economy, and especially the labour market, will be more certain.