Greens push to legislate ‘living wage’

Employers are calling on the Albanese government and industrial umpire to 'get the balance right' on minimum wages.

Employers are calling on the Albanese government and industrial umpire to 'get the balance right' on minimum wages. Photo: AAP

Australia’s 200,000 lowest-paid workers would have their incomes tied to 60 per cent of the median full-time wage, effectively creating a “living wage”, under new legislation proposed by the Greens.

Greens employment spokesman Adam Bandt will introduce a bill that would direct the Fair Work Commission to phase in the boost to workers’ pay in the “earliest possible time”.

The current minimum wage of $694.90 a week is 55.1 per cent of full-time median earnings. At 60 per cent, the minimum wage would stand at $756.66, according to today’s wage levels.

The policy would give effect to a proposal from the Australian Council of Trade Unions, and seeks to wedge Labor, which has argued the “goal should be a “real living wage” but is yet to formally back the union movement’s ambitious minimum wage target.

The FWC has previously rejected the union’s calls for large increases and a minimum wage target.

Mr Bandt conceded the proposal took some control over minimum wage rises out of the commission’s hands.

But he said lifting the minimum wage in tandem with the unemployment benefit Newstart would be more beneficial to those on low incomes than a tax cut.

“If trickle-down economics worked, we’d all be drenched by now,” he said.

“It’s time for the government to put its hands back on the levers.”

The commission would decide how to phase in the increase to reach the target, while considering factors including the state of the economy, inequality and the circumstances of specific industries.

The Australian Chamber of Commerce and Industry claimed in February the ACTU’s “living wage” proposal would cost businesses between $5 billion and $8 billion, leading to job losses and potential business closures.

The ACTU has rejected this analysis, and argues the increased consumer spending meant businesses would benefit.

Workplace Relations Minister Craig Laundy has said such an increase would send “shockwaves through the economy”.

The Greens’ proposal mirrors Theresa May’s Conservative government’s target for the UK minimum wage to hit 60 per cent of median earnings by 2020, subject to “sustained economic growth”.

That target was first recommended by Britain’s Low Pay Commission, the equivalent of the Fair Work Commission.

A Reserve Bank report released earlier this month said small minimum wage rises could actually help create jobs, but also warned larger increases could eventually hurt employment.

The ACTU has called for a $50-a-week pay rise in its final submission to the ongoing annual wage review, while employer peak body Ai-Group argued for a “modest” increase of $12.50.

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