The Fair Work Commission has handed down its annual wage review, lifting pay for nearly three million of Australia’s lowest-paid workers.
Key Takeaways
- The minimum wage rises from $24.95 to $26.44 an hour, and from $948 to $1,004.90 per week.
- The 4.75 per cent increase falls short of the unions’ demand for six per cent and above the employer lobby’s request of 3.5 to 3.9 per cent.
- FWC president Justice Adam Hatcher described the decision as “particularly challenging” amid rising inflation and global economic uncertainty.
- Headline inflation rose 4.2 per cent in the 12 months to April; underlying inflation sat at 3.4 per cent.
- The increase does not fully close the real wage gap, which the Commission estimates would require a rise of more than five per cent.
- The changes takes effect July 1.
Key Background
Award wages have been losing ground to inflation every year since 2021. Last year’s review made a dent in that gap, but a fresh surge in prices – driven largely by fuel costs following the Middle East conflict – has since pushed it wider again.
The Commission found it would take a rise of at least 5.3 per cent to close the gap entirely, but ruled that out as too risky in the current climate.
Workers at the very bottom of the pay scale get a bigger lift than the standard 4.75 per cent, as the Commission begins a staged process of raising the wage floor across the modern award system.
Crucial Quote
“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 reliant on modern award wage rates that would be sufficient to close the real wage gap entirely,” FWC president Justice Adam Hatcher said in his statement.
“The outcome we have determined will, however, at least ensure that modern award-reliant employees generally are not worse off in real terms than they were as at 1 July 2025.”
Big Number
60.6% – The proportion of modern award-reliant workers who are female.
This is a developing story. More to come.
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