Employers, unions argue over wage increase

EMPLOYERS are willing to put $10 extra a week into the pockets of low-income earners, far short of the $27 a week unions say is needed.

Industry groups argue small businesses could close if wages rise too much, but unions say low-paid workers are consumers who would stimulate the economy.

The ACTU says the gap between rich and poor has widened over the past 10 years, as wages failed to keep pace with the cost of living.

But Australian Industry Group chief executive Innes Willox said increasing the minimum wage too much would hurt 500,000 part-time workers who wanted more hours.

"Too big an increase in Australian minimum wages would also further damage Australian competitiveness," Mr Willox said.

"Our minimum wage levels are already amongst the highest in the OECD."

ACTU secretary David Oliver said profits were up, productivity was up, but workers' share of the pie was getting smaller.

He predicted Australia would have a US-style working poor within 20 years if the minimum wage wasn't increased steadily.

Last year, a push by unions for the minimum wage to be increased by $30 a week was met with a request by employers for the pay rise to be limited to $5.80 a week.

The minimum wage went up $15.80 to $622.20 a week in 2013.

Mr Oliver said that 20 years ago the minimum wage was 60 per cent of average full-time wages, but had fallen to 43 per cent.

Submissions from employers and unions were lodged with the Fair Work Commission on Friday, with a decision expected in June.

The commission's decision will apply to Australian award wages from July 1.

Employment Minister Eric Abetz said it was up to the Fair Work Commission to determine wages and the government would be making its own submission to the review later on Friday.

It was appropriate the FWC found out the details of that before it was publicly announced, he told reporters in Canberra.

Senator Abetz said the government was concerned about easing the burden on low income earners but that would largely come from scrapping the carbon tax.

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