wage in Australia

Take $21 and raise you $1400 | Business Sense | News.com.au

THE country's lowest paid workers will take home an extra $21 a week but it may be small comfort when they see how much Kevin Rudd has awarded his top public servants - a whopping $1400 a week.

The pay umpire has granted minimum wage earners an extra $21.66 per week, $5 less than unions were asking for.

On the same day the rise was announced, it was revealed that the Prime Minister had signed off on a 18.9 per cent pay rise for the secretaries of all 19 government departments, taking the packages for the highest paid public servants from $410,890 to $488,557.

Just months ago, Mr Rudd urged politicians to show restraint on their own pay levels as an example to the community to keep inflation pressure down.

"We need to be able to face the Australian community in the eye and say that we in the privileged position of this place are doing one small bit when it comes to exercising some wage restraint on our part," he said in February.
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Australian Fair Pay Commission (AFPC) head Ian Harper announced the rise for minimum wage earners today, saying the rise, when combined with relevant tax and social security changes, would provide low income households with real increases in disposable income from October 1.

"It is a decision that takes into account the state of the national economy and the circumstances of low paid Australians,'' he said.

Prof Harper said the commission was aware of the financial pressures on low income households.

"Movements in consumer prices, in particular, have put many low income households under considerable financial stress,'' he said.

He said the commission had sought to rebalance the factors in the economy such as inflation, employment conditions and factors putting pressure on low-paid workers.

The ACTU had argued for a $26 per week rise, which would have lifted the minimum wage to $548.12 per week, while employer groups said a $13.30 rise was more reasonable.

Last year's rise was $10.26 a week.

Wage divide

Professor Richard Mulgan of the Crawford School of Economics and Government said the wage rates in the private sector were much higher, but there was also a greater degree of pressure and responsibility.

However, he said it may be difficult for the Government to justify the generous wage increases for senior public servants when it was calling for others to show wage restraint.

"This is the difficultly with relativities in this area. It's a question of who you compare yourself with," he said on ABC radio.

"If you compare yourself with a private sector manager then you're not earning a great deal."

"On the other hand, if you're comparing yourself with the people you're working alongside and other public sector workers at a time when you're trying to talk a little bit about wage restraint ... it's not particularly helpful."

The Federal Government had declined to nominate a figure but said the AFPC should balance the potential impact of minimum wage increases on inflation, employment and the financial needs of low-paid workers.

The commission believed the pay rise would have only a minor impact on those factors.

But Australian Chamber of Commerce and Industry (ACCI) said the wage rise would put a $1.35 billion impost on labour costs.

"A number of small businesses are going to have to find additional money and that could mean they will defer spending or defer investment,'' ACCI spokesman Scott Barklamb said.

He said the wage rise was "economically a risky one'', and businesses that would be impacted included retail, hospitality and small manufacturing.