Sensible minimum wage decision required to renew confidence in the economy

Friday 27 April, 2012 | Tags: Workplace and Employment Policy, Economic Policy

In a submission lodged today with Fair Work Australia, the Chamber of Commerce and Industry Queensland (CCIQ) has called on the umpire to ensure minimum wages do not act as a barrier to gaining employment.

A substantial increase to minimum wages is not recommended at a time when economic conditions remain weak and uncertain, particularly in award reliant industries.

The majority of award reliant employees tend to be located in industries which are experiencing a very poor economic environment at present (ie retail, hospitality, accommodation, construction, manufacturing industries).

Employers in these industries currently have very limited capacity to afford a substantial increase in minimum wages.

The cost imposts for the coming financial year, including the carbon price, transitional arrangements associated with the modern awards, increasing costs associated with implementing the Fair Work Act and other regulatory requirements, are just the tip of the iceberg of concerns raised by businesses in the lead up to the 2011/12 Annual Wage Review decision.

Many businesses are in a precarious position with significantly diminishing capacity to absorb the continuing onslaught of rising business costs in a price-sensitive consumer environment.

Businesses will have limited options available but to implement cost cutting measures, which is likely to include reducing employment costs and therefore numbers.

Businesses require time to overcome the significant cost implications associated with industrial relations changes and wage increases over previous years, and the implementation of further cost increases looking forward.

An increase to minimum wages above that supported by award reliant businesses will jeopardise the performance of the economy and further reduce the ability of these employers to employ and retain staff.

CCIQ strongly urges Fair Work Australia to implement an increase to the minimum wage that is substantially less than $9 per week, with preferably no increase until such time when businesses are better placed to afford it and remain viable.

CCIQ does not want to see an outcome where incentives to employ are diminished and employment opportunities are reduced.

There is a need for Fair Work Australia to protect confidence in the economy by encouraging employment.