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Australia to Raise Minimum Wage by 4.75% from Jul, Equivalent to HKD148.3 Hourly; Unions Welcome Move
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Australia's Fair Work Commission President and Justice Adam Hatcher said in a ruling on Tue (2nd) that the national minimum wage will be raised by 4.75% from July 1. The new minimum wage will be AUD1,004.90 per week (38 hours), equivalent to about HKD5,636, or AUD26.44 per hour (about HKD148.29). The increase is slightly below the Reserve Bank of Australia's inflation forecast, citing uncertainty in the economic outlook. Australia's largest union welcomed the wage decision, saying businesses are capable of absorbing the pay rise. Hatcher noted that the Reserve Bank of Australia forecasts headline inflation at 4.8% in the year to June 2026, and that wage growth of more than 5% is currently needed to narrow the real wage gap. He added that it was regrettable but necessary to conclude that, in the current uncertain environment, granting an increase sufficient to fully offset the real wage gap for employees reliant on modern award rates would be neither practical nor responsible. Hatcher said Australia's economy faced capacity constraints in 2H25, while conflict in the Middle East further intensified existing inflationary pressures. He said the Reserve Bank of Australia's monetary tightening measures would undoubtedly slow the economy over the coming year. Australia's annual wage review is conducted by an expert panel, which sets the minimum wage for each fiscal year based on submissions from employer groups, unions and the government. Hatcher said the ruling directly affects nearly 2.8 million workers, accounting for 21.1% of the workforce. Ryan Wells, economist at Westpac, said there is a risk that inflation expectations could remain elevated for an extended period if the ruling becomes a benchmark for wage-setting across the broader economy, making the Reserve Bank of Australia's task more challenging. However, he expects a gradual cooling in the labor market and an economic slowdown to mitigate this risk. Australia's unemployment rate jumped to 4.5% in April, a four-and-a-half-year high, further indicating that the economy is weakening amid high interest rates and energy shocks triggered by the Iran conflict. The Reserve Bank of Australia raised interest rates for a third consecutive time in May to curb strong inflationary pressures. It had previously forecast that the unemployment rate would not rise to 4.4% until mid-2027. (da/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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