Amanda Rishworth:
Well, today the government welcomes the Fair Work Commission’s decision to award a 4.75 per cent increase to the 2.7 million award‑reliant workers in this country. This represents a real wage increase supporting workers with cost‑of‑living pressures. Now many of these workers are low‑paid, predominantly women, work casually and are in industries like retail, healthcare, accommodation and food services. Now in addition to the 4.75 per cent increase for the modern award‑reliant workers, the Commission has determined to lift the floor of the lowest‑paid workers that rely on the minimum wage by delivering the lowest classifications a 6 per cent wage increase.
In handing down their decision, the Commission emphasised that these workers required a higher increase because they were the lowest‑paid workers and have been hit hardest by the war in the Middle East and the resulting inflationary pressures, particularly in non‑discretionary items like fuel and food. This decision today means the lowest‑paid full‑time workers who rely on the national minimum wage for the first time will be paid over $1,000 a week. With this decision this means that since Labor came to government the national minimum wage has increased by more than $12,000 per year and this translates into a 12 per cent real wage increase for our lowest paid workers. Now the government has advocated to the Commission for an economically sustainable real wage increase and has welcomed the Commission’s decision today because it is a win for working Australians. We also welcome the larger increase that has been delivered for our lowest paid workers.
Now of course in making the decision the Fair Work Commission’s expert panel was required to consider a number of factors including the performance of our national economy. They highlighted that this year’s decision was particularly challenging because of the degree of complexity referring predominantly to the war in the Middle East. We thank the Commission for the work that they’ve undertaken in balancing the multiple factors that they are required to consider. Unlike previous governments, this Labor government has advocated for a wage increase to the Commission each and every year and we as a government will continue to fight for the wages and conditions of working Australians. Hand over to you, Treasurer.
Jim Chalmers:
Thanks very much, Amanda. This week and this government is all about higher wages, lower taxes and a fair go for first home buyers and in that context we do welcome the decision from the Fair Work Commission today. This is the pay rise that millions of Australian workers need and deserve. This is the sustainable real wage increase that the government has called for and we’re pleased to see it delivered in today’s decision. This means that the minimum wage is up more than $12,000 a year since we came to office 4 years ago – it’s about a 30 per cent increase in the minimum wage, which is a very good thing. When it comes to these cost‑of‑living pressures that Australians are confronting right now we see decent pay as part of the solution, not part of the problem and so we’re pleased to see those cost‑of‑living pressures recognised by the Commission in this very welcome decision that they’ve taken today.
Because of this decision and because of this government, more Australians will be earning more and keeping more of what they earn. Earning more and keeping more of what you earn is a really important way to respond to some of these cost‑of‑living pressures that we’re seeing in the economy. So a really important week, the wages decision today, the national accounts tomorrow and the legislation by the end of the week in the House of the Representatives when it comes to our tax cuts and our fair go for first home buyers.
When it comes to the national accounts I just wanted to make a few comments. Obviously we don’t pre‑empt the number that comes out tomorrow, we’ll see that in due course, but any growth in the current circumstances would be welcome. I think any through‑the‑year growth with a 2 in front of it would be a particularly welcome outcome, when you consider all of the global economic uncertainty and volatility that we are confronting. We already know from the partial data that investment was very, very strong in the March quarter and that’s a good thing. We know that exports have come off substantially in the numbers that have come out this morning and we know that the public contribution to growth in the economy will essentially be flat. So how that all shakes out we’ll see in tomorrow’s data. But any through‑the‑year growth with a 2 in front of it, I think, would be a very welcome reminder that we confront this period of substantial global economic uncertainty and volatility from a position of genuine economic strength.
Last point I’d make is about the legislation before the House this week, and the decision that the Coalition party room has just taken to oppose tax cuts and to oppose housing once again. What this decision from the Coalition party room shows is that they haven’t learned a thing from the first term of this government, they haven’t changed a bit since the last election. If anything they are performing worse now than they were under Sussan Ley and the reason for that is very clear. The Liberals and Nationals are trying to stand in the way of tax cuts for millions of Australian workers and they’re trying to make it harder, not easier, for more Australians, especially young Australians, to buy their first home. That is the consequence of the decision that the Coalition party room has taken. So this is a big test for them, whenever the vote comes before the House of Representatives – will they make the same mistake that they made last time and vote against tax cuts and vote against housing or will they learn from that mistake and support the tax cuts that Australians need and deserve to help with the cost of living and will they support first home buyers getting a toe‑hold in a market which has been too difficult for them for too long. Happy to take a few questions. We’ll start with Rosie, then Mark, then Katina, then we’ll come over this side.
Journalist:
Treasurer, just on housing, would it be a good thing for house prices to go down or is it preferential they continue to rise but at a slower pace?
Chalmers:
We’re not targeting a particular price outcome, a particular percentage or dollar figure when it comes to housing. The Treasury assumptions that we released with the Budget is that house prices will continue to grow but more slowly. Our job is to make sure that there are more affordable options for first home buyers to get a toe‑hold in the market. Now the people who are defending this broken status quo, they think it’s fine for more and more Australians, particularly young Australians, to be locked out of housing and we disagree. That’s why we’ve taken these difficult decisions – contentious decisions – to try and make the housing market and the tax system fairer for people who are trying to buy their first home. Now we have seen in recent times some volatility in the housing market, a fair bit of that actually preceded the Budget a few weeks ago. We saw auction clearance rates for example start to come down earlier in the year as a consequence of interest rate decisions and softer economic conditions and so the Budget is not the only determinant of house prices or auction clearance rates. Our job is to make sure there’s more affordable opposites for more Australians to buy their first home and that’s what the Budget is all about. Mark then Katina, then we come over to Phil and Greg.
Journalist:
Treasurer, just a couple of points on the wages decision. You said you wanted to see a substantial real wage increase so other than a limited number of people on C13 [inaudible]. So you wanted more than this decision as delivered presumably? And secondly, the business community says this could send a lot of small businesses to a tipping point. Is that a genuine concern?
Chalmers:
In the second part of your question I’m going to throw to Amanda in a second. But I wouldn’t agree with your characterisation of our view of this decision. We think this decision strikes a very effective balance. This is the sustainable real wages increase that we called for and the submission that Amanda and I made on behalf of the government. We’re very pleased to see a sustainable real wage increase in this decision as I said before. This is the pay rise that millions of Australian workers need and deserve, particularly at a time when these cost‑of‑living pressures are acute. So I think the Fair Work Commission has done a good job striking all of the appropriate balances.
Rishworth:
Yeah, look in terms of the work and the reasoning that the Fair Work Commission gave it was very clear that it did consider the business conditions currently before us and they did acknowledge that we have seen increased profits in 2025 compared to 2024 and increased business investment compared to the previous year. So they did reference some of those business conditions but also recognised that their desire to play catch up from 2021 was not fully realised in this decision because they were considering the uncertainty that was playing out in the Middle East. So, quite frankly, I think that the Fair Work Commission has done an excellent job at considering all these factors and it clearly outlines its reasoning in its decision.
Chalmers:
Thanks. Katina then Phil then Greg then Clare.
Journalist:
Thanks Treasurer. Just back on the tax legislation. Given you can work out the implementation details via regulation and don’t need legislation, will we see what those regulations are by the time has passed and, you know at the end of June or certainly before parliament is back in August or do we have to wait longer than that?
Chalmers:
Well, I mean a few important points about this most recent beat up in this case about the powers which are available to Treasurers and in legislative instruments in tax legislation in a not especially unusual way. It is not unusual for tax laws to work this way or for definitions to be finalised in legislative instruments. Those legislative instruments often can be disallowed by the parliament. That’s the first point.
The second point is that our Budget papers have already made it really clear that people who invest in new builds which genuinely add to supply will be able to choose between the existing 50 per cent discount or a discount for inflation. So the examples that we have used are investors in new apartments, developments and subdivisions will get the choice of discount but not if it’s a simple knock down rebuild or a renovation. We have been clear already but it’s not unusual for legislative instruments to be used to finalise these sorts of definitions or these sorts of implementation arrangements. The best way to think about the legislative schedule is this week the House of Representatives will consider the core elements, negative gearing, capital gains and the 2 tax cuts. The reason that they are in the same bill is because 2 of those measures pay for the other 2 in a package which is broadly neutral over the forward estimates. That’s why they are together.
As I’ve said in this room and in other places on a number of occasions now, it’s not unusual for there to be subsequent legislation. When it’s broad, ambitious tax reform, like what we are undertaking, if you compare that with other episodes of substantial tax reform it’s not unusual for there to be multiple rounds of legislation or for legislative instruments to be used. And that’s what you’ll see in this case too.
Journalist:
And the timing?
Chalmers:
To be determined. I mean the timing of the core elements is this week in the House of Representatives and in to the Senate as soon as possible. We know that we’ve got a Senate enquiry over the next few weeks and then in to the Senate after that. Some of the other subsequent bills are subject to the consultation that we’re engaging in right now. I’ve flagged in the Budget, flagged on Budget night, again not especially unusual that governments would go about it that way and the legislation will follow that meaningful consultation. Phil then Greg then Clare.
Journalist:
Thanks Treasurer. Can I take you back a few years soon after you got in to government? Fair Work awarded that catch up pay rise as it was called at the time of 5.2 per cent and you said at the time, I’ll paraphrase, but we shouldn’t be chasing inflation with wages, this was a one off. That was the tone of your language. We don’t believe there should be automatic mechanical minimum wage rises on every occasion to match inflation. You’re both just standing here now saying this is effectively matched inflation, on which ever measure you use. What happened to that discipline about chasing inflation with wages when inflation is high?
Chalmers:
Our position is consistent which is that every Fair Work decision on the minimum wage should take in to consideration all of the economic conditions and both Amanda and I have said in different ways today that I think the Fair Work Commission has done a good job balancing cost‑of‑living pressures, the elements around small business, the broader economic conditions to come to this decision. The point that I was making back then is a point that I would repeat today, is that there is a good reason why there’s not an automatic calculation of these decisions and that’s because we asked the Fair Work Commission to factor in a whole bunch of variables and we made a submission which recognises that as well. Greg and then Clare.
Journalist:
There was a bit of a break out in caucus today about AUKUS, which is an agreement that’s not particularly popular amongst a lot of Labor members. Given you’ve broken prior election commitments on tax, what’s to stop the government rethinking its support for AUKUS, particularly given the structural budget pressures and the unpredictability of Donald Trump?
Chalmers:
We support the AUKUS arrangements and I don’t get in to the details of discussions in the parliamentary party. Clare.
Journalist:
Just coming back under the opening when you said that it’s a sustainable and real wage increase. The RBA has said that anything less than [indistinct] over 5 per cent wouldn’t actually amount to closing the real wage gap that opened up particularly last year after the [indistinct] accelerated inflation. So might be sustainable but is it wrong to call out 4.75 per cent a real wage increase, when inflation for example in June quarter is looking at 4.8?
Chalmers:
Well – do you want to go first Amanda, I’ll go after you.
Rishworth:
Look, the point that the Commission makes is that there has been catch up required since 2021. When we are looking at the coming year when this wage increase will apply it’s not only a real wage increase to the current inflation figures, but the predictions to the end of the year in which this increase will apply will also be a real wage increase. So in any way you look at it this is a real wage increase. Of course, the Commission had to balance doing catch up, there is some catch up they’ve identified in this real wage increase back from 2021, but they have recognised some of the uncertainty in this decision and that is what is economically responsible and why they’ve done such a good job.
Journalist:
Sorry just on that Minister, though, it’s not any way you look at it, it’s a real wage increase. It’s only if you don’t look at what’s happened in the year before.
Chalmers:
No, well it’s a real wage increase by any measure if you compare it to the April headline CPI that was 4.2. This is 4 and 3 quarters. If you compare it to the average this year so far, 3.7. It’s obviously a real wage increase compared to that. If you compare it to the Budget forecast for 26–27 which is 2.5 per cent through the year it’s a real wage increase in that regard as well and so by all of those measures this is a real wage increase, it is in our view sustainable. It takes in to consideration all of these economic considerations that we have been talking about. We’ll go behind you, we’ll just take those 3 and then we’re done.
Journalist:
What does the minimum wage rise mean for wages more broadly and what are the inflation impacts?
Rishworth:
So in terms – and the Commission’s outlined this in its decision – the minimum wage and award reliant workers make up approximately 11 per cent of the wages bill and so they considered the impact that it would have both on the wage price index which is quite minimal along with inflation. They considered all those factors but when we look at the impact on the wages bill it is a small proportion of the overall wages bill.
Chalmers:
And just to add to that, I mean if you look at the way wages have been performing more broadly in our economy, 8 of the last 10 quarters we’ve seen real wages growth, remembering that real wages were falling substantially, I think, for 5 quarters in a row before we came to office, we have been able to turn that around. Eight of the last 10 we’ve seen real wages growth. And I think there’s been something like 14 or 15 consecutive wage price index reads of 3 per cent or higher. I think our predecessors never had more than 3 per cent in their time in office and so we have been turning wages around and that’s because our reason for being as a government is to make sure that people can earn more and keep more of what they earn. That’s why this decision is so important. That’s why the tax cuts are so important too. Shane.
Journalist:
Treasurer, the national accounts pre‑data, the net [distinct] percentage points growth ‑
Chalmers:
Yeah.
Journalist:
There’s nothing coming from government which means growth will have to come out the household sector but they are being bit by what the RBA has done. The March quarter doesn’t include the most recent rate rise, plus what’s coming along because of the war in the Middle East. Do you think the economic, the activity of households is going to actually slow from this point?
Chalmers:
Well it remains to be seen but obviously households are being buffeted by the war in the Middle East and some of the other pressures in our economy. And we haven’t seen that part of the partial data for tomorrow’s national accounts, as you know. But what we know already is with a big detraction from exports, with a flat contribution from public demand then the heavy lifting is going to be done by the private sector once again. We saw some stunningly positive business investment figures in the March quarter last Thursday and we don’t always read about the good stories in our economy as much as we should. But those CapEx numbers came in 6 times stronger than the market was expecting. The construction investment numbers came in 4 times stronger than the market was expecting, and so yes in this context of extreme global economic uncertainty and all the pressures that people are under, I think, any growth in the March quarter is welcome. Any through‑the‑year growth with a 2 in front of it especially so, and that’s because at a time when the export number has gone backwards, at a time when people are under pressure, is a flat contribution from public demand, then investment and consumption is going to need to do the heavy lifting in the private sector.
Journalist:
Thanks Treasurer. You highlight – on tax reform – you highlighted how your changes would affect the top one per cent of [indistinct]?
Chalmers:
That’s not quite the right interpretation of the numbers. But I do understand that there’s a story here that you’re following and so let me respond to that. The figures that the Treasury Secretary were using were about the benefits of the existing regime for average workers versus the benefits for someone who is in the top one per cent. And whether the benefits for average workers is $5,000 or $10,000 it compares to $700,000 average benefit for someone in the top one per cent. So the Secretary’s point still stands. I understand that Secretary Wilkinson corrected a number in her speech. But the overwhelming point that she was making whether it’s $5,000 or $10,000 is compared to $700,000 and so that point – that the system is skewed to those already doing well – still stands. Now I see that the Shadow Treasurer has been attacking the departmental officials for having to correct a number, which is very strange given he has repeatedly got his numbers wrong. He got the number of people with shares wrong. He’s got $110 billion black hole over the forward estimates with uncosted unfunded commitments. He got his own costings on his own policy wrong by more than $79 billion. He got the fuel excise wrong on national television. He got the RBA’s dual mandate wrong in his first week. So the point that I would make about that story, I know that there’s some interest in it from some bureaus, but the difference here is between an average benefit of $5,000 versus $10,000 compared with $700,000 for people in the top one per cent that’s the point that Secretary Wilkinson was making. Thanks very much.
Journalist:
A question on the Fair Work Commission?
Rishworth:
Sure.
Journalist:
[Indistinct] allegations of misbehaviour made against 2 of her fellow commission members, [indistinct], will you release that report and if not why?
Rishworth:
Well let’s be really clear. I commissioned an independent report, I’ve examined the findings of that report and in my opinion the matter is now settled.
Chalmers:
Thanks very much.