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News News Battlers' pay rise outpaced by inflation
WAGE rates for hundreds of thousands of low-paid workers will fail to keep up with inflation this year under the Australian Fair Pay Commission's decision yesterday to increase minimum wages by between $5.30 and $10.26 a week.

In its second ruling under the Federal Government's Work Choices laws, the commission awarded a $10.26 a week pay rise for workers on minimum pay scale rates of up to $700 a week. Those on minimum rates above $700 a week will receive an increase of $5.30 a week.

 Employers will have to pass on the increases - which apply to 1.2 million employees on minimum pay scales because they do not have employment agreements with higher wages - from the first pay period in October.

The chairman of the commission, Ian Harper, said the increases were "responsible and fair", and would lift wages in real terms - that is, after the impact of inflation on the cost of living - for the country's lowest-paid workers.

The Minister for Workplace Relations, Joe Hockey, said the decision would deliver real wage increases.

But yesterday's decision will not do so for the vast majority of workers on minimum pay scales unless inflation declines significantly in coming months.

For a worker on the lowest pay scale rate of $511.86 a week, $10.26 is worth 2 per cent. By comparison, the Reserve Bank is forecasting that consumer prices will rise by 2.25 per cent in the year to December.

For a worker on the minimum rate for a tradesperson, the $10.26 rise will be worth 1.7 per cent.

For a worker on average weekly ordinary time earnings of just over $1000 a week, the commission's $5.30 a week rise will be worth 0.5 per cent.

The Prime Minister, John Howard, said the wage increases would be "a little above the inflation rate, but not so far above the inflation rate to put upward pressure on interest rates".

In its first decision, which applied from last December, the commission lifted minimum wage rates by between $22.04 and $27.36 a week. Those rises did increase wages in real terms, lifting them by more than the increase in consumer prices between the Australian Industrial Relations Commission's previous decision in the middle of 2005 and last December.

The NSW managing director of the St Vincent de Paul Society, John Picot, said the rise would bring little joy to the lowly paid. "For the people on low incomes the major challenge is managing rising housing costs because most of them would be in the rental market," Mr Picot said. "The $10.26 really just barely manages to keep up with the effect of inflation on their cost of living."

The ACTU president, Sharan Burrow, said it was the lowest dollar amount awarded to minimum wage workers for 10 years. "This measly pay rise is a slap in the face for hard working Australians and their families who are facing rising petrol prices, rents, childcare and education costs," she said.

But the Australian Chamber of Commerce and Industry's director of workplace policy, Peter Anderson, said the latest increase had to be seen alongside the minimum wage rises in December. Mr Anderson said the two increases together meant employers would have to pay wage rises totalling $37.62 a week in the 10 months between last December and this October.

GOING RATES Pay rises this year .

Tradesperson on minimum pay scale: 1.7 per cent. .

Federal minimum wage: 2 per cent.

Retail workers on enterprise agreements: 3.3 per cent.

Construction workers on enterprise agreements: 4.7 per cent.

Federal parliamentarians: 6.7 per cent.

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