“Imposing unaffordable wage increases on these small businesses will put jobs at risk,not create them.”
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Australian Retailers Association CEO Paul Zahra similarly cited the challenges of supply chain issues,staff shortages,and the cost of energy and fuel being faced by retailers.
“We fear the scale of this increase could tip some businesses over the edge,” Zahra said.
Theretail sector is expected to see a decline as consumers increasingly put their wallets away amid persistent cost of living and inflation pressures.
“Our economic recovery is uncertain,and with interest rates on the rise and families set to tighten their household budgets,consumer spending is likely to slow in the months ahead posing more challenges for discretionary retailers,” he added.
“The scale of this increase from the Fair Work Commission could send some businesses to the brink.”
Restaurant and Catering Association chief Belinda Clarke went one step further,warning businesses would be forced to shut their doors.
“This is sadly going to mean more business closures,” Clarke said. “I know a lot of business owners will have zero ability to absorb the extra cost.”
In their submissions to the Fair Work Commission,many of these business groups had pushed for an increase at around half the 5.2 per cent rate,or even less:Ai Group had urged for a “modest” 2.5 per cent,while ARA had said 3.2 per cent was appropriate.
Jennifer Westacott,the chief executive of Business Council of Australia,which does not make submissions to the wage review,said wage increases needed to be supported by broader economic growth,calling for “genuine reform and action” to ease labour shortages.
This means encouraging business investment from “record-low” levels,a ceasefire to the workplace relations “deadlock”,and a “functioning” enterprise bargaining system.
“We need a pathway to sustained wages growth fuelled by productivity,” she said.
Westacott pointed out that raising the national minimum wage did not mean wages were growing meaningfully.
“Wage inflation is not the same as long term wages growth. Wage inflation without productivity would hold back the economy and put Australia’s record low unemployment rate at risk,” she said.
Australia’s biggest supermarkets pay part of their workforce according to the General Retail Industry Award (GRIA),which is higher than the national minimum wage. GRIA workers will see a 4.6 per cent increase or the $40-a-week pay rise,whichever is higher.
“We support an increase in team member wages that keeps pace with underlying cost-of-living increases and are committed to doing the right thing,” a Woolworths spokesperson said.
Coles said it will review Fair Work’s decision carefully. “Our team members will be the first to know of any changes to their pay arrangements,” a spokesperson said.
Aldi indicated that its workers are paid more than the award rate. “Our annual review of pay will factor in today’s announcement as well as broader market conditions;this will inform our decision on our new rates,” said a spokesperson.
“Our goal is to ensure that our employees remain fairly remunerated for their dedicated work.”
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