Ai Group advances this submission in relation to the 2023 Annual Wage Review (AWR), which encompasses a review of the National Minimum Wage (NMW) and modern award minimum wages, as well as the making of a National Minimum Wage Order by the Commission, as required by the Fair Work Act.

It is glaringly obvious that, this year, the Panel has before it a particularly difficult task. Moreover, it is a task that, in the current highly challenging and precarious economic conditions, is of paramount importance to employees that are directly reliant upon the outcome of the decision, the employers that engage them and the broader Australian economy.

This submission deals in detail with the relevant statutory context governing the conduct of the AWR. Such matters have been extensively traversed in previous AWR decisions. The task entails a consideration of the relevant statutory considerations in the context of the prevailing economic and social considerations. This includes the mandatory matters that must be taken into account pursuant to the minimum wages objective and the modern awards objective. It is salient to here observe that there is a degree of tension between some of the specified considerations and that there is not a particular primacy is not attached to any of these considerations.

In seeking to provide ‘a fair and relevant minimum safety net’ and ‘the maintenance of a fair safety net of minimum wages’ as contemplated by the FW Act, the Panel must strike a fair balance between the equally important and inherently interconnected interests of Australian employees and their employers.

The Panel must strike such a balance in the context of the well-ventilated challenges of historically high inflationary pressures, which have manifested as cost pressures on both employers and employees, as well as a slowing ‘multi-speed’ Australian economy, a weak global economic outlook, anaemic and indeed declining profitability in major industries and a labour market that has recently delivered positive outcomes for many groups of employees in terms of robustly improved employment opportunities as well as accelerating wage increases. It must also do so in a manner that avoids undermining such positive outcomes in the face of the foreseeable continued slowing of the economy.

Crucially, the Commission must be mindful that, in the context of a domestic economy beset by high inflation, coupled with notoriously low levels of productivity improvement, it does not entrench or extend the pain that such inflationary pressures impose upon both industry and households by granting excessive or unsustainable wage increases.

In advancing these submissions, Ai Group acknowledges the particular pressures that are currently bearing on low paid workers in lower-income households. Such matters must be carefully balanced along with other matters that the statutory framework mandates must be taken into account, as well as relevant broader considerations. Crucially, the circumstances of employers struggling with cost pressures, must also be weighed. A simplistic adherence to a proposition that wages must follow, or indeed exceed, current inflation levels cannot be accepted. A more nuanced, responsible and moderate approach is required in the interests of all stakeholders.

The submissions that follow address the relevant considerations that should guide the Panel. We have not at this stage advanced a specific quantum of any proposed increase. It is premature to do so, given the turbulent economic conditions and uncertainty over the approach that will be taken in the Commonwealth Budget to various matters, including any measures that the Government may introduce to assist low-income households.