The Fair Work Commission (FWC) last week handed down its Annual Wage Review. As always, the NRA had made a strong contribution in the months leading up to the decision, making both an initial submission and then a submission in reply to the FWC.
Throughout the process we urged the Commission to take a cautious approach in its deliberations due to the slow period that retail has experienced over the last 12 months. The NRA advocated for what we considered a fair increase of 1.8 per cent, which was in line with the most recent Consumer Price Index.
Although the FWC’s decision to increase the minimum wage by 3 per cent is well above our recommendation, and we are concerned about the impact it may still have on small business, we are grateful that it is still well below the job-destroying 6 per cent advocated by the ACTU.
The December 2018 quarter showed that even though the economy continued to grow, the rate of the growth was slowing. GDP in the December 2018 quarter grew 0.2% in seasonally-adjusted chain volume terms, the lowest quarterly growth since September 2016. So the idea that things are bubbling along nicely and that retailers have wads of cash in their back pocket which can otherwise be used to top up wages is not a view we share.
Having said all that, now that the federal election is out of the way, and the nation has avoided the uncertainty that comes with a hung parliament, we are optimistic about a much-needed increase to consumer confidence. Should the RBA decide to cut interest rates when it meets later today, this will also encourage people to shop.
Moving forward we will continue to make robust representation to the independent umpire when it comes to the minimum wage. Those who have never run a small or medium business might not understand the unintended consequences that come with a rate that is too high, but the NRA will make sure that all stakeholders are aware of need to strike a balance between fairness and affordability.
All the best for the week ahead!