MILDURA Regional Development boss Brett Millington doesn’t expect the latest increase to the minimum wage will have a drastic impact on Sunraysia’s economy when it rolls out nationwide from July 1.
Mr Millington said while any change to wages “does provide some challenges for small businesses”, relatively few people in the region would be affected by the change.
“I don’t know that there would be a significant number in our region that would be necessarily aligned with the minimum wage increases,” he said.
“But certainly, if there are small business owners that have staff on the minimum wage, then that’s another challenge that they’ll face.”
The Fair Work Commission announced this week that from the beginning of the new financial year the minimum wage would rise by 2.5 per cent to $20.33 an hour, or $772.60 a week.
The increase will put an extra $18.80 a week into the pockets of about 2.2 million of Australia’s lowest-paid workers.
The 2.5 per cent increase will also be added to award minimum wages, but while most workers will get the extra money in the first week of July, award increases for some industries will be delayed for up to five months.
Workers paid under the general retail award will not see the pay boost until September, while it won’t roll out to minimum wage-earners in tourism, hospitality, gyms, aviation and some areas of retail until November.
According to Fair Work Commission president Iain Ross, while the Australian economy as a whole had “exceeded expectations” and “economic recovery is well under way”, those sectors still had a way to go as they recovered from the pandemic recession.
He also noted risks of COVID-19 outbreaks and the slow pace of the vaccine rollout had been factored into the decision to increase minimum wages by 2.5 per cent, rather than the 3.5 per cent unions called for in the lead-up to the announcement.
Employer groups had pushed for a 1.1 per cent rise, arguing a higher increase would hurt already struggling businesses.
But Mr Millington was hopeful increased wages would lead to a boost in local spending in Sunraysia.
“There’s always a couple of viewpoints, one being that there will be additional dollars in the economy,” he said.
“It provides people who might otherwise not have those abilities to purchase additional things from local retail or stores an extra two and a half per cent increase to help to do that.”
