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Australia's minimum wage rises by $40 a week

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The Fair Work Commission has handed down an inflation-beating increase to the minimum wage of 5.2 per cent, equating to a $40 weekly pay rise for millions of workers.

Since 2021, Australia's minimum wage had been $20.33 an hour or $772.60 a week, but advocate groups have called for it to raise to meet the demands of soaring inflation.

That will now rise to $21.38 an hour, or $812.60 a week.

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Casual employees covered by the national minimum wage also get at least a 25 per cent casual loading.

The federal government had called for a 5.1 per cent wage rise, in line with inflation, but business groups warned against such a rise.

FWC President Ian Ross cited the sharp increase in cost of living, along with rising inflation, as key reasons behind the decision.

"We accept that the approach we have adopted will result, albeit minor, compression in relativities," he said.

"But that consideration is to be balanced against the need to provide greater relief to low-paid workers in the context of rising cost of living pressures."

He said the strength of the labour market would not have a "significant adverse effect" on the national economy.

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"We acknowledge that the increases we have determined will mean a real wage cut for some award-reliant employees," he said.

"This is an issue that can be addressed in subsequent reviews."

Awards in the aviation, tourism and hospitality sectors will not have to incorporate the new wage rises until October 1 due to "exceptional circumstances.

All other modern awards will have to include the increase from July 1.

Currently inflation is sitting at a 20-year high of 5.1 per cent, with Reserve Bank of Australia Governor Philip Lowe predicting inflation will reach 7 per cent by the end of the year.

The FWC reviews Australia's minimum wage on a yearly basis.

Last year it was increased by 2.5 per cent to meet the rising cost in living expenses.

Prior to this year's federal election, Prime Minister Anthony Albanese committed to supporting an increase in line with rising inflation.

More to come.



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