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CPI the limit on wages growth says NFF

17 March 2008

LODGING its submission to the Australian Fair Pay Commission’s (AFPC’s) 2008 General Wage Review today, the National Farmers’ Federation (NFF) is calling for an increase in the minimum wage commensurate with no more than the Consumer Price Index (CPI).

“Capping minimum wages growth in line with CPI – equating to not more than $15 per week – is a sensible approach in the current economic climate,” NFF President David Crombie said.

“In the case of farmers, we’re hoping 2008 is the year we start to emerge from drought, and we will need around 100,000 extra employees to facilitate a full recovery.

“Typically, farm employers already pay above minimum rates, reflecting the need to attract employees given the chronic labour shortages in regional areas. In fact, jackaroos are recorded as the best paid juniors across all major sectors, including mining.

“The NFF maintains that the Standard Federal Minimum Wage is an important safety net. Its main purpose is to fix a level of pay below which it is unacceptable to pay employees. For the small number of farmers who, due to drought, have been unable to pay above the minimum wage, constraining wages growth has allowed them to keep employees in work, rather than lay-off staff.

“At the opposite end of the spectrum, the current labour and skills shortage crisis has seen market rates soar well above the minimum safety net. In fact, less than 13% of the Australian workforce is affected by the increase, with many of those enjoying high family incomes.

“The purpose of a minimum wage is not to make a statement about what labour is worth to the market, as the Australian Worker’s Union (AWU) misguidedly theorises. Rather, it is to provide minimum protection for employees – having regard to their needs and prevailing economic concerns.

“The AWU claims minimum wages must increase by more – perhaps as much as the $26 per week the Australian Council of Trade Unions is seeking – in order to compete with sectors such as mining. Those who can, and must, compete for labour do so by paying above Award rates, making the AWU’s spurious ‘wage freeze’ argument redundant.

“Conversely, those few who are paying the minimum rate will inevitably reduce their staff if the minimum wage grows excessively, leading to higher unemployment – one of the AFPC’s key considerations is to ensure this does not occur.

“Even high paying sectors are finding it hard to attract and keep labour. The NFF, which has entered a Memorandum of Understanding with the Australian Government and the Minerals Council of Australia, has embraced a cooperative approach to regional development and population strategies to build the pool of labour in rural and regional areas.

“Actual wages, rather than a safety net rate, are certainly important, but we must not lose sight of the fact that other factors, such as a flexible working environment, will also help attract workers to particular employers and sectors.”

[ENDS]

The NFF’s submission to the AFPC is available at: Submissions to Government

Media Enquiries: Brett Heffernan on (02) 6273 3855 or 0408 448 250.

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