ACCI response to annual wage review
Media Release: 2 June 2026
The Australian Chamber of Commerce and Industry is disappointed with the decision handed down today by the Fair Work Commission increasing the minimum wage by 6 per cent and 4.75 per cent for award wages.
Australia’s largest and most representative business network says the increase will add to cost pressures across the economy at a time when many businesses, particularly small businesses, have very limited capacity to absorb additional costs.
Chief of Policy and Advocacy David Alexander says ACCI had pushed for a modest but reasonable rise of 3.5 per cent.
“We considered this to be responsible, fair and proportionate,” said Mr Alexander
“Today’s decisions further delink wage outcomes from productivity, and economic activity will suffer as a result.
“For businesses that are already struggling with interest rate hikes, high inflation and high fuel prices, this decision putting up wage costs will only add to the burden.”
ACCI estimates the decision will impose an economy‑wide cost of around $11.7 billion.
ACCI is also disappointed at the reclassification of the lowest incomes to include an additional increase to minimum wages not linked to productivity.
Mr Alexander says productivity growth has been anemic for an extended period and is expected to fall back to zero in the middle of 2026. Wage‑setting must remain disciplined and anchored to productivity realities.
“In an environment of weak and uneven productivity, the economy’s capacity to absorb large, mandated wage increases is fundamentally constrained.
“The Reserve Bank has cautioned that when productivity is weak and the economy is operating with excess demand, higher labour costs are more likely to flow through to prices rather than be absorbed through efficiency gains.
“The RBA also stated before the fuel crisis that ‘inflation was already too high and being driven by economy‑wide capacity pressures’ with demand needing to slow to restore balance between demand and supply.
“This decision compounds the problems arising from the recent junior rates changes, where the Commission has passed a decision that employees aged 18 to 20 will move to 100 per cent of the adult rate after 6 months’ service.
“When layered on top of annual wage review increases, it will place particular pressure on small businesses in sectors that employ a younger workforce and provide critical entry‑level opportunities to Australia’s young population,” said Mr Alexander.