Labor has backed in a pay rise for 2.7 million minimum wage earners as the Fair Work Commission deliberates further pay hikes.
On Thursday, the Albanese government submitted to the Annual Wage Review that the commission should aware an “economically sustainable real wage increase” to Australian award workers.
About 2.7 million Australians – or about a quarter of the nation’s workforceare – are on the national minimum wage or award-reliant.
Employment Minister Amanda Rishworth said low-paid workers were more exposed to “unexpected financial shocks” and experienced greater financial hardship.
“Our government believes the millions of baristas, care workers, clerks and cooks should get ahead,” she said.
“An increase to the minimum wage can also play a role in closing the gender pay gap given women are disproportionately represented in award-reliant jobs.”
Treasurer Jim Chalmers said workers were doing it tough and needed a sustainable real wage increase.
“With fuel prices going up and mounting pressure on families, we’re helping with the cost of living in responsible ways,” he said.
“This will help millions of workers in low paid and award-reliant jobs deal with these rising costs, alongside all the support we’re rolling out like tax cuts and cheaper medicines.”
The government does not set the minimum wage, nor does its submission recommend a specific amount.
It does, however, suggest an increase consistent with underlying inflation returning to the Reserve Bank of Australia’s target band of 2-3 per cent in 2026-27 and which would provide relief to workers.
The Fair Work Commission will decide upon any increase to the minimum wage in coming months, which will come into effect from July 1.
The minimum wage is currently $175.40 per week higher than when the Albanese government came to office in 2022.
The upcoming decision comes against a backdrop of renewed economic turmoil, with the Iran war driving up fuel prices and putting pressure on family budgets.
Petrol prices have, on average, risen by more than 30 per cent since February 23, while diesel has risen by more than 40 per cent.
The Consumer Price Index rose 3.7 per cent in February, down 0.1 per cent from the previous month, according to stats released on Wednesday.
The sticky inflation figure has raised the risk of another interest rate rise.
The RBA raised the official cash rate to 4.10 per cent on March 17, the second consecutive hike in 2026.
