South Australian businesses are already battling higher fuel, rent, insurance, energy and compliance costs, and many have little room left to absorb another sharp wage rise.
The Australian Chamber of Commerce and Industry (ACCI) has warned the Fair Work Commission against a large increase to minimum and award wages through this year’s Annual Wage Review.
In its submission, ACCI has called for a 3.5% increase to the National Minimum Wage and modern award wages. ACCI says this is a fair and responsible increase given current economic conditions.
ACCI CEO Andrew McKellar said the review was taking place in a tougher environment than last year.
“Businesses are being hit from all sides,” Mr McKellar said.
“With fuel prices surging, margins already squeezed and confidence weakening, now is not the time to lift wages without proper regard to the broader economic environment.”
For South Australian businesses, the decision will be felt most strongly in sectors such as retail, hospitality, tourism, accommodation and food services, where wages are one of the biggest operating costs.
ACCI has warned that union calls for wage increases of 5% or more would risk adding further pressure to inflation at a time when businesses and households are already dealing with higher costs. Its modelling shows a 5% increase would add around $48 per week to the minimum wage and cost the economy an extra $12.25 billion a year.
ACCI has also raised concerns about proposals to shift the minimum wage benchmark from the C13 classification rate to the higher C12 rate. It says this would create an additional structural increase to the wage floor, on top of any increase awarded through this year’s Annual Wage Review. ACCI says this would add a further 3.6%, or more than $34 a week per employee, on top of any increase from this year’s review.
Businesses are also preparing for higher costs from the abolition of (upper) junior wage rates. Retail, accommodation and food services are expected to be among the most affected sectors. Although these changes will be phased in between 1 December 2026 and 1 July 2029, ACCI analysis shows the junior rates decision alone will increase wage bills by around 4.6% in these industries in the 2026 – 27 financial year, before any increase from this year’s wage review.
Many businesses are already dealing with higher fuel, rent, insurance, energy and compliance costs. At the same time, workers are facing real cost-of-living pressures, and businesses understand the need for wages to keep pace where possible. The challenge is finding a balanced outcome that supports employees without placing unsustainable pressure on businesses, particularly when margins are tight and customers are sensitive to price increases. A measured wage increase would help balance the needs of workers with the ability of businesses to keep trading, employing and investing.
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We can help you understand your obligations, reduce the risk of underpayments or non-compliance, and prepare for any changes to minimum and award wages. Our team can help interpret award provisions, explain wage rates and minimum entitlements, and identify which award may apply to your employees.
The South Australian Business Chamber’s Modern Award PAYpack service gives members access to modern award subscription packs, including wage rates, regular updates, award information and practical tips to help manage workplace obligations with greater confidence.
For further information on PAYpack, please contact the South Australian Business Chamber’s Business Advice Hotline on 08 8300 0000.
