Today’s announcement is a significant blow to South Australian businesses already suffering from significant cost increases over the last 12 months. The South Australian Business Chamber had supported a 1.2 per cent increase, reflective of the broad circumstances of South Australian businesses.
Since the Fair Work Commission started deciding the National Wage increases in 2010, it has been set consistently higher than National and State inflation averages. South Australia’s current CPI at 2 per cent, and the national rate at 2.1 per cent, is significantly below the 3.3 per cent increase awarded to both the national minimum wage and all Modern Awards.
South Australia’s businesses have already been hit with spiralling electricity and gas costs in an economy shifting to absorb the loss of auto-manufacturing. The South Australian economy needs to start turning in the right direction and today’s decision will not help in that transition.
The South Australian Business Chamber argues that the Fair Work Commission has not taken into consideration the specific economic conditions of each State and has left some of the harder hit economies high and dry with this latest decision. South Australia can make the necessary structural changes to become an economically viable and prosperous state, however, these changes can only occur in the right macro-economic climate.
“Coupled with significant underemployment, youth unemployment, and the second lowest labour force participation rates in Australia, today’s decision by the Fair Work Commission to increase the minimum wage by 3.3% is a significant disincentive to South Australian employers taking on more staff” says Anthony Penney, Executive Director, Industry and Government Engagement at the South Australian Business Chamber.
“Business conditions in South Australia do not substantiate this increase with unemployment increasing from 6.7 per cent to 7.3 per cent and 5,800 more people unemployed over the last 12 months. The substantial increase to the national minimum wage has negated any benefit retail and hospitality employers received in the penalty rates decision” says Mr Penney.
Mr Penney said “Jobs for young people must be at the centre of South Australia’s economic turnaround to stem the damage from Holden’s exit and the substantial fall in apprentice and trainee commencements which has occurred since 2012”.
“Increasing the minimum wage significantly above the current inflation rate does not incentivise employers to help address South Australia’s high youth unemployment rate which sits at 18.7 per cent and substantially above the national average of 12.8 per cent.”
“The South Australian Business Chamber now calls on the State Government to assist South Australian businesses in its upcoming budget through raising the payroll tax threshold and restructuring the Jobs Accelerator Grant, particularly to encourage hiring of apprentices, trainees and graduates.”
