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Aussie minimum wage – diametrically opposed views

April 3, 2014 Corporate, Headline News 2 Comments Email Email

egtmedia59How low should Australia’s minimum wage go? Should it rise? No, says the country’s accommodation industry, which has recommended to the Fair Work Commission that there should be no increase in the minimum wage in 2014.

In its submission to the Annual Wage Review, the Accommodation Association of Australia (AAA) cites increases in penalty rates and the superannuation guarantee as reasons for taking its position.

“More than 80% of Australia’s accommodation businesses are small to-medium enterprises, while 75% of the Accommodation Association’s members are located in regional areas and any increase in the minimum wage would increase or impose financial hardship on them,” says the Association’s Chief Executive Officer, Richard Munro. Dusit-Hot-Deals-Banner-250x250-06

His views are diametrically opposed to the position of the Australian Council of Trade Unions (ACTU) which has warned that a AUD 27 wage rise per week for the country’s lowest paid workers, including hospitality staff, is essential if Australia is to avoid creating an underclass of working poor.

ACTU Secretary Dave Oliver says that new research contained within the ACTU submission to the Fair Work Commission’s Annual Wage Review shows that if action isn’t taken to increase the minimum wage and turn around “the alarming decline in the relative earnings of low-paid workers” then Australia will have an entrenched working poor as they do in the United States within 20 years.

The AAA disagrees. “For casual staff under the hospitality award, penalty rates apply on top of a loading, meaning that on public holidays, for example, employers have to pay casual staff at 250% in addition to the 25% casual loaded rate,” Munro says.

“According to our submission, this has ‘the potential to cause significant economic difficulties for the accommodation industry’ because businesses will find it difficult to make a profit on these days.

“This will be brought sharply into focus over Easter when casuals who work over these four public holidays days declared in NSW will receive the equivalent of 11 days’ pay.

“With minimum superannuation payments required to increase to 9.5% from 1 July, this represents another imposition on the bottom line. Therefore, there should be no increase to the minimum wage in the hospitality award. Any increase could impact on the viability of some small accommodation businesses, notably motels and B&Bs in country areas.”

Munro used the Carbon Tax to bolster his argument, saying the tax had had “a negative impact” on the accommodation industry.

“Accommodation businesses are heavily reliant on electricity, food production and transport and in most instances, the cost to operators of these suppliers has increased following the introduction of the carbon tax. It’s another reason why our industry is calling for no increase in the minimum wage. In addition, we strongly support the repeal of the carbon tax, as a priority.”

The ACTU’s Oliver is pushing for a AUD 27 per week increase to the minimum wage, to “ensure the gap between low paid workers and the rest of the workforce does not widen even further.

“Australians do not want to live in a country of ‘haves’ and the ‘have-nots’ and the only way for low-paid workers to keep up is for the Fair Work Commission to approve this increase.

“That’s why the ACTU is demanding the National Minimum Wage increase to AUD 649.20 a week for Australia’s lowest paid including cleaners, retail and hospitality staff, child care workers, farm labourers, and factory workers.

“This would mean a 71-cent-per-hour increase from AUD 16.37 per hour to AUD 17.08 per hour. We’re asking the Fair Work Commission to increase the lowest award wages by the same amount, AUD 27 per week. For other Award reliant workers above the benchmark tradesperson’s rate, unions seek a 3.7% increase.”

Oliver warned that allowing inequality to worsen will ensure that within 20 years Australia will have a working poor similar to the United States.

“The minimum wage is now just 43.3% of average full time wages – the lowest proportion on record,” he said.

“If action isn’t taken, by around 2035 that figure could languish below 30%.

“This will make life in Australia much tougher for low-paid workers who will find themselves well and truly left behind. Unions are not going to sit back and let that happen.

“If we want to be the country of the fair go then Australia’s minimum wage must be increased.

“It is the responsible thing to do and it is the right thing to do – Australians are emphatic, we do not want a US style underclass of working poor in this country.”

Written by : Peter Needham

Currently there are "2 comments" on this Article:

  1. bruce weston says:

    it is not the minimum wage that hurts but it is the fact that it is a ‘right’ for it to be increased annually . It is impossible in our industry to stabalize at all when EVERY YEAR we are FORCED to find an increase in our wages base of 2 , 3 or even more % , this combined with another 0.25% AUTOMATIC increase in super , paid by employer , are costs that are very very hard for any small operator to recoup , we cant go to a tribunal that can FORCE the public to pay more . Take this upcoming easter weekend 250% wages for 4 days in a row , great idea – but devastating to our industry – and people wonder why services drop off

  2. gnits says:

    …people are so ignorant to know that wage increase across the board is good for workers….on the contrary, any increases in wages is inflationary…prices of basic goods and commodities will rise with it…it will also backfire as employers will tend to hire less staff or even lay off workers for that matter… it is better for hospitality workers to seek for tax reductions as this will improve their take home pay and will not affect greatly the employers… always remember that the government should be more protective of employers because without them there will be no work…get that peeps…

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