The Australian Chamber of Commerce and Industry has lodged its submission to the Fair Work Commission’s annual wage review.

ACCI considers an increase of not more than 2 per cent to be fair, reasonable and responsible because:

• It takes into account economic and business conditions, which are fragile.
• It takes into account easing inflationary pressures in the economy and is consistent with supporting the goal of returning inflation to within the RBA’s target band of 2-3 per cent.
• It is consistent with negative productivity performance in the Australian economy over the last 12 months.
• The Fair Work Commission needs to take account of the exceptional wage increase it has delivered over the past two years, particularly last year, and the subsequent revisions of data used to justify those decisions.

“Any wage increase must be linked to productivity to be sustainable. A failure to align wage growth with genuine productivity improvements will add to inflationary pressure,” ACCI chief executive officer Andrew McKellar said.

“Another increase not aligned to productivity outcomes will worsen Australia’s economic challenges. Higher inflation will last longer, causing much greater pain than is necessary for Australian households and businesses.

“Another excessive increase runs the risk of compounding ongoing input cost pressures for Australian businesses, in particular small businesses who are struggling to maintain employment in an already complex environment.

“A 5 per cent increase, as called for by the ACTU, is irresponsible, unaffordable and increases the risk that interest rates will be higher for longer.”

ACCI’s submission can be seen here