By The Straits Times | Created at 2026-06-02 02:06:40 | Updated at 2026-06-07 13:12:38
5 days ago
SYDNEY – Australia’s independent wage-setting body said on June 2 that the country’s lowest-paid workers will get a 4.75 per cent pay rise from July, roughly in line with an expected rise in inflation projected by the central bank.
It was, however, lower than increases of 5 to 6 per cent sought by trade unions.
The Fair Work Commission said the minimum wage for a week’s work will rise to A$1,004.90 (S$920.69), or A$26.44 per hour, from July 1, a decision affecting around three million workers.
The commission said tighter monetary policy by the Reserve Bank of Australia will “undoubtedly” slow the economy in the year ahead, and noted that inflation has accelerated due to the Iran war disrupting oil supplies.
“Taking into account all of these matters, we have concluded, regrettably, that it would not be practicable or responsible in the current uncertain circumstances to award a real wage increase for employees,” it said.
“However, we consider that we should at least ensure... employees generally are not worse off in real terms than they were as at July 1, 2025, and that we should also take additional measures to protect the position of the very lowest-paid worker.”
Consumer price inflation was 4.1 per cent in the first quarter and is seen peaking at 4.8 per cent in the June quarter, well above the central bank’s 2-3 per cent target band.
The central bank has raised interest rates three times this year to 4.35 per cent, reversing the 2025 easing due to soaring energy prices.
Rate-sensitive data has shown consumer demand cooling, with April household spending falling, home prices flattening, and unemployment edging higher.
Currently, swap markets imply just a 6 per cent chance of a fourth rate hike from the RBA in July, while pricing in a total of 21 basis points of tightening for 2026, equivalent to less than a one-quarter-point increase. REUTERS
