David Alexander doorstop at Parliament House on minimum wage
Transcript: 2 June 2026
David Alexander:
The Fair Work Commission today handed down its decision on minimum wage introducing an increase of 4.75 per cent. We're disappointed with the Fair Work Commission's outcome. We believe that businesses are already struggling with high inflation, high fuel costs and interest rate rises and this comes on top of those costs and will only detract from their ability to do business. When you step back, you can see that the commission is essentially further delinking productivity from wage outcomes and that is a really worrying thing for the broader economy. Happy to take questions.
Journalist:
How much is this going to hurt small businesses? We've already heard from small businesses after the budget and they said that they're doing it tough. Is this going to add even extra pressure and just how much pressure, particularly on those small ones?
David Alexander:
I think it will add extra pressure to small businesses. They tend to be the sector that disproportionately employs people on the minimum wage and so naturally that's going to impact on them even harder. Those businesses are doing it tough through the fuel crisis, through the interest rate hikes and through the broader cost of doing business being so high.
Journalist:
Sorry. What would you have liked to have seen? Because obviously inflation, people on the lowest wages need to get some kind of recognition of that as well. What would have been a fair balance?
David Alexander:
Yes. We put to the commission that 3.5 per cent would have been the appropriate increase. Given our very poor productivity outcomes and the levels of inflation, we think that was responsible and reasonable. Unfortunately, the commission has gone above that significantly to an unaffordable level for a lot of businesses.
Journalist:
Do you believe this will result in perhaps small businesses having to make some really tough decisions or maybe having to close?
David Alexander:
For some small businesses, this will be too much to bear. So they're being asked to wear an increase in their wage costs of 4.75 per cent. So for some businesses they will pass that on and it'll end up in inflation. For others, they'll wear it themselves. It could be the tipping point for some businesses. Others will scale back their investment intentions. So there's not good news for the business community.
Journalist:
Up until the RBA has forecast that for the year till June, the end of June, inflation will rise at 4.8 per cent, which is higher than the 4.75 per cent wage increase announced today. Does it mean that employees will not be getting a real wage cut in those terms?
David Alexander:
So the RBA forecast 4.8 per cent, as you say, but then it tails down towards almost half that over the course of a year. So what you're seeing is the Fair Work Commission embedding that increase in the minimum wage for the year. So we think this is not going to be productivity linked and will therefore put pressure on inflation.
Journalist:
The amount of workers that are covered by this by the minimum wage awards about one in five, but because it's low pay work, it's about 11.2 per cent of the national wage (inaudible). So how can it really have that much of an impact on the economy at large?
David Alexander:
For those businesses that are impacted, it will have a significant impact. So there's no way around the fact that the decision will impact large numbers of businesses. As I say, small businesses in particular, but in industries there'll be various industries such as retail, hospitality, accommodation, where the impacts are more severely hit.
Journalist:
What about the argument from unions that since about 2021 after that, the post COVID inflation supply growth is still backwards in real term so that they need to get pay rises above inflation to close that gap?
David Alexander:
The only way to get sustainably higher wages is to have thriving businesses paying those wages. You really need businesses to be doing well to afford to pay higher wages. That's how you get genuine underlying prosperity. So what these commission decisions are doing is eroding the linkage between productivity and wage outcomes. That's not a good way to run an economy. It's upsetting the incentive structures that work in an economy to drive innovation and the best decisions. So we think that the approach of the ACTU is fundamentally misguided.
Journalist:
Does ACCI have a view on what we're starting to see maybe a slump in the housing market? Does ACCI have a view on that? Are you concerned about what you're seeing in the housing market and what it might mean?
David Alexander:
Our key concerns with the impact of the government's measures in the budget on the broader business community. Regarding housing, we do think there's too little focus on housing approvals. Getting more supply onto the market would help to take pressure off some of the strong pressures that have been running for a number of years, but the government's tax measures have met with strong resistance from the business community. They are taxing investment in business at a time when we need a supportive environment for investment in business. So we think that that's going in the wrong direction.
Journalist:
Do you think that this will encourage businesses to invest in the (inaudibe)
David Alexander:
I think more the case will be that they will either have to pass on those costs to consumers, so higher inflation, or if they're going to wear it themselves, there's going to be an inability to invest in their own futures. So it's going to erode their competitiveness. I think that will be the main impact.
Journalist:
The minimum wage has gone up for the last three years, but do you think this (inaudible)?
David Alexander:
Well, we do think that the decisions of the Fair Work Commission are exacerbating problems in the labour market. By removing the linkage between productivity and wage outcomes, they're fundamentally undermining business prosperity and that feeds through to a lower level of wages that they can afford to pay through the future.
Journalist:
Can you just give us a bit of an update in terms of ACCI's consultation with the government on a carve out for businesses from the CGT changes? Has there been any recommendations made or proposals put by the government?
David Alexander:
So since the budget, we have been discussing the impact of the tax changes with the government and the Treasury. Our concern is that while the government recognises that there are going to be particular sectors that will be hit by the changes as they stand and they're looking to ameliorate the damage, we say, why damage at all? Surely business needs support for investment rather than penalties. So while you can look at ameliorating the damage to some sectors, why would we be thinking about damage at all?
Journalist:
So the government's still communicating that they're looking at quarantining any exemptions to specific sectors like tech or for example.
David Alexander:
So the government's been talking, you will have heard them talking about the tech sector and startups, but the impact of these measures goes beyond tech to every other industry. It goes beyond startups to every other industry. The government's going to be harvesting enormous amounts of revenue from this measure and others and that can't help but weigh down on business investment. So we're very concerned and we've expressed our concerns to the government.
Journalist:
Are you concerned that the government isn't splitting controversial measures in the bill? It seems like they're doing it to play politics with the opposition. Are you concerned that the business community has essentially been shut out so the government can get its political agenda through?
David Alexander:
We're concerned that this has all been underthought and underdeveloped. So even today you're seeing the Treasury admit that it's got some important modelling wrong. This is the sort of thing that happens when you rush a big change. There's unanticipated consequences in modelling in legislative outcomes. So we're seeing that regularly over since the budget day by day, new surprise events coming out. So that's why we've said, let's just go back to the drawing board. Let's not go after business by taxing investment in business. Let's rethink this so that we can have a supportive environment for business.
Journalist:
You may have addressed this before I arrived, sorry. But on the national minimum wage, do you think businesses are going to be forced to pass on the cost to customers through the goods and services?
David Alexander:
Yes. One of the consequences of adding to the costs for businesses is that a number of them will pass that on to consumers in the form of higher inflation. So the Fair Work Commission is really not addressing this second round effect. It's going to increase that area of wages above inflation and that will kick off another round of inflation.
Journalist:
Sally McManus and the ACTU pushed for 6 per cent. It's very clear they have a seat at the table for government decisions. Are you concerned that business is really being shut out and has the business sector failed in terms of communicating with this government and are you concerned for future Treasury decisions going forward?
David Alexander:
Well, we've been very clear on a number of these fronts on minimum wage decisions, on the budget decisions with tax. From day one in the budget, we've been very clear and very firm that these will be damaging to business. As said before, you don't get sustainable wage rises if you don't have thriving businesses to pay for those pay rises. So the government should be paying more attention to the thriving of business so that they can support genuine wage increases over time. That's how you look at growing general prosperity.
Journalist:
But for the government, if you look at their decisions, they really do just push through. What would you say to your supporters who feel like organisations like yours are not doing enough for their members or for small businesses by failing to get any concessions from the government at all while it seems the ACTU is controlling everything?
David Alexander:
So we've had very strong feedback say since the budget from our members that we are doing the right thing and we are raising these issues in a very strong way and putting it in front of the government. So I have no doubts that our members respect our advocacy on the issue of the government's tax changes. That's it. Thank you so much.