“A 2.5% increase is too much in the current context, especially when employers are also facing a 0.5 percentage point increase in the July 1 pension guarantee and low-paid employees have benefited personal income tax changes equivalent to a 1.6% increase in pre-tax income. When these elements are taken into account, the increase in remuneration amounts to 4.6% for an employee at the minimum wage.
“A minimum wage increase of 2.5% is not justified when the latest inflation figure is 1.1% and wages across the economy are only increasing at an average rate 1.5%.
“On a purchasing power parity basis, Australia has the highest national minimum wage in the world. The increase will put Australia’s national minimum wage even further away from minimum wages in other countries.
“The decision sends a very bad signal and risks having a negative impact on the recovery. At the current stage of the recovery, the focus should be on boosting employment. The decision will create a real risk of a significant slowdown in employment growth and rising unemployment and underemployment.
“There are still many obstacles to a full recovery. The global pandemic continues and the level of infection in many countries is increasing rapidly. Significant travel restrictions are expected to remain in place in Australia for at least the next 12 months and significantly hamper growth prospects.
“The thousands of struggling businesses will have a hard time understanding today’s decision,” said Willox.