Wage increase a significant blow for Queensland businesses

Thursday 3 June, 2010 | Tags: Workplace and Employment Policy

Today's decision by Fair Work Australia to increase wages by $26 a week is extraordinary and foolish given the fragile state of the Queensland economy, Chamber of Commerce & Industry Queensland (CCIQ) announced today.

CCIQ President David Goodwin said we can expect this increase to create significant hardship for many businesses who are struggling from mounting costs of doing business in Queensland.

"The Queensland business community were looking for a moderate increase in the minimum wage of $12.50 to take into account a poorly performing Queensland economy and additional labour costs associated with transitioning to new modern awards," Mr Goodwin said.

"Among difficult trading conditions, Queensland businesses need time to rebuild capital and to return to profitability. It will be impossible for businesses to do so while input costs continue to rise.

"Quite simply the Queensland economy and businesses are not in a position to absorb a substantial wage increase."

Figures released yesterday by the Australian Bureau of Statistics show that Queensland had the lowest economic growth in both trend and seasonally adjusted terms for the March Quarter 2010 and the Year to the March Quarter 2010. Agriculture, construction, retail, accommodation and food service industries where amongst the poorest performing industries, all which are reliant on the minimum wage.

Today's wage increase also comes on the back of a 13% increase in both workers' compensation premiums and energy prices.

"It is inevitable that jobs will be lost," Mr Goodwin warned.

"Queensland businesses have already indicated that they will reduce their employment levels as a result of this increase. In the current economic environment, jobs are more important than a substantial wage increase. In our view, if it was choice of a job or a wage increase, the majority of employees affected by this adjustment would elect to keep their job.

"The $26 increase will also act as a disincentive for employers to recruit new staff.

"CCIQ believes that Unions and Fair Work Australia have a responsibility not just to those in employment and their members but also the unemployed. The prospect of these disadvantaged Queenslanders now finding work is clearly reduced," Mr Goodwin said.