Annual Wage Review urged to consider Coronavirus

19 March, 2020 by Brydie Allen

The Fair Work Commission’s Annual Wage Review 2019-2020 is currently underway, with the extended deadline to receive submissions closing last week. 

Among the submissions received, a core theme has been the recent bushfire crisis and the current COVID-19 pandemic. In light of these issues, some submissions called for the review to be pushed back, while others urged the Commission to consider smaller increases than previous years. 

Advertisement

Submissions included one from Master Grocers Australia (MGA) independent retailers in conjunction with MGA Timber Merchants Australia. The associations represent independent stores across the country that collectively employ more than 120,000 people, including in liquor stores. 

The 115 page submission indicates that despite the resilience of independent retailers, the uncertainty caused by recent events is concerning, given the “most unexpected and unprecedented set of economic circumstances”.

In 2019, the minimum wage rose by 3.0 per cent, with some penalty rates also increased as part of an incremental raise decided in 2017. In 2018, it had risen 3.3 per cent and the year before that, 3.5 per cent. 

The MGA submission noted that these three years of increases, coupled with the recent issues: “Have affected the viability of many stores to maintain their businesses.”

It said that for those affected by natural and health disasters: “Restoring their businesses will be a challenge and if they have to do that with a higher wage cost than previously, then recovery will be slower and be even more difficult than was previously expected.”

MGA’s submission also included appendixes from a member survey, in which 91 per cent of respondents say minimum wage increases have affected employment in their store. Some respondent quotes were listed, where the impact of previous wage increases was described. 

“The cost of doing business is increasing in all areas whereas product prices are flat or falling because of increased competition,” one respondent said.

Another wrote: “We are fighting increased costs at a time when sales have been adversely affected.”

The Commission also received a submission from the Australian Industry Group, which said that current data was not enough for a responsible decision to be made in the wage review. The group emphasised that the review should wait until the next quarter’s results have been received, as that is when it will be more clear what the pandemic is doing to the economy. 

Chief Executive of the Australian Industry Group, Innes Willcox, described their submission and said: “the heightened economic uncertainty requires that a different approach is taken this year in setting minimum wages.”

“The Australian community is facing a rapidly escalating health threat from the Coronavirus ‘COVID-19’ pandemic. The Australian economy and a large number of businesses have been disrupted by measures implemented to respond to COVID-19 internationally and deeper disruptions now seem inevitable. 

“The effects of COVID-19 have come at a time the economy is already slowing and are on top of the damage and disruption of the summer bushfire crisis and severe drought.”

Because of these reasons, the submission argues that the timeline of the review should be altered, with the decision finalised only after the Australian Bureau of Statistics releases the National Accounts data on 3 June. 

Further, the group has not put forward a suggested action for the review, as they have said the state of the economy is too uncertain right now. 

Other submissions also do not put forward a suggested action for the review because of this reason, including the NSW Business Chamber, which stated that any action taken this year needed to be “more cautious” than other years. 

According to the current timeline of the review, the final consultations will take place on 19 and 20 May in Melbourne and Sydney respectively.