Australia’s Fair Work Commission (FWC) has given a pay rise of 4.75 percent to workers on the minimum wage, saying it will help counteract rising inflation.
Delivering the decision, FWC President Adam Hatcher said it was not “practicable or responsible” to award a rise above the 5 percent needed to close the real wage gap that had developed since the COVID-19 pandemic.
The economy had been performing well until around February of this year, he said, though it had experienced capacity constraints in the latter half of 2025, with inflation forecast to be well above the Reserve Bank target band.
“The tightening of monetary policy by the Reserve Bank, which followed, will undoubtedly slow the economy in the year ahead,” Hatcher said.
“On top of this, the Australian economy faces the wild card of the Middle East conflict. The consequential disruption to oil supplies has accelerated inflation in Australia [and] added uncertainty as to the trajectory of the economy, at least in the near future.”
“The real wage gap, which has opened up between the rate of the CPI and modern award wage rates, has particularly affected the living standards of the low paid and their capacity to meet their needs,” Hatcher said.
“This is particularly the case when the rate of inflation for non-discretionary essential goods and services is running significantly higher.”
Ahead of the United States (3.2 percent in 2026 and 2.1 in 2027), the UK (3.2 and 2.4), Germany (2.7 and 2.3), New Zealand (3.1 and 2.3), and Japan (2.2 and 2.3).
The commission estimates that this will affect around 100,000 of the lowest-paid employees.
