Battle begins over Fair Work

BUSINESS and industry groups have urged Fair Work Australia to show restraint in lifting the minimum wage in light of the welfare measures included in last week's Federal Budget.

In post-budget submissions to FWA's annual wage review, each of the groups argued that increases to Family Tax Benefit Part A payments, a tripling of the tax-free threshold to $18,200, tax cuts and the introduction of the SchoolKids Bonus would have the effect of boosting the incomes of low-paid workers. 

The Chamber of Commerce and Industry Queensland argued this needed to be weighed up against the challenges facing businesses.

"CCIQ strongly urges Fair Work Australia to consider the additional support being provided to low income earners in the coming financial year, measured against the precarious position of many businesses who are faced with a significantly diminishing capacity to absorb the continuing increase in business costs," CCIQ advocacy general manager Nick Behrens wrote.

"CCIQ maintains our position that an increase to the federal minimum wage above that supported by award reliant businesses will jeopardise the performance of the economy and reduce the ability of these employers to employ and retain staff, especially in light of promised businesses initiatives (i.e. the cut in the company tax rate) not being delivered."

In its initial submission to the wage review CCIQ urged FWA to "implement an increase to the minimum wage that is substantially less than $9 per week, preferably no increase until such time when businesses are better placed to afford it and remain viable".

The Australian Chamber of Commerce and Industry, Australian Industry Group and Australian Business Industrial echoed those sentiments.

"An estimated 1.5 million families will now receive two cash grants per year totalling $820 (for each secondary school child) and $410 (for each primary school child)," the AIG wrote in its submission, referring to the SchoolKids Bonus," AIG wrote.

"This will deliver an extra $2.1 billion to families over the next four years. This will significantly raise disposable incomes of lower-income households and is clearly relevant to an assessment of the extent to which minimum wages should be raised to address the needs of the low paid.

"While some families were previously eligible to an equivalent tax deduction, the untied, cash-in-hand nature of the new arrangements mean they are more widely available and more generous for most households."

The AIG proposes a $14-per-week increase to both minimum award wages and the national minimum wage.

In its initial submission the ACCI asked the wage review panel to "consider any increase on an award-by-award basis and grant an increase of not more than $9.40 per week to modern award minimum wage classifications and to the national minimum wage".

The groups were highly critical of the Federal Government's decision to abandon the 1% cut to the company tax rate, arguing this will place further strain on already stretched businesses and negate the positive effects of the loss carry-back measures announced in the Budget.

The money saved in scrapping the company tax relief instead will be paid to families.

In other post-budget submissions to the review the Australian Council of Trade Unions and the Australian Catholic Council for Employment Relations each urged FWA not to be influenced by the increases to welfare contained in the budget.

The ACTU has called for a 3.8% increase for most award-reliant workers, and an increase of $26 per week to the minimum wage.

"We submit that the panel should not reduce the amount of any increase in minimum wages on account of the increase in the disposable incomes of some low-paid households that will arise from the Budget," the ACTU wrote.

In its post-budget submission the Federal Government wrote that "any increase to the national minimum wage and award wages ... reflect changes in living costs and other changes in the economic environment since the last minimum wage rise in 2011".

Topics:  actu cciq fair work australia federal budget 2012

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