David Alexander interview on 4BC regarding minimum wage increase
Transcript: 2 June 2026
Gary Hardgrave:
David Alexander is the chief of policy and advocacy at the Australian Chamber of Commerce and Industry and joins me now. David, good to talk to you again. Now you're pushing for 3.5 per cent. They've gone a tad higher, but the trouble is it's the smallest of businesses that are going to be hurt the most of all.
David Alexander:
Yeah, that's right, Gary. We're disappointed with the Fair Work Commission's outcome. Businesses are already struggling with high inflation, high fuel costs, and with those interest rate rises. So this comes on the top of those and it's only going to detract from their ability to do business. So it's going to hit small business the hardest because they disproportionately employ people on the minimum wage. And so that sector, there's particular industries as well such as retail, hospitality, restaurants, cafes, accommodation. There are sectors likewise that are going to be disproportionately hit by these outcomes.
Gary Hardgrave:
I mean, let's face it, those sorts of sectors, those sorts of jobs, you can't use AI to replace a barista. You can't use AI to replace somebody cleaning a hotel room. You've got to pay people. And often they're paid, as you say, at the minimum wage. The decision becomes for small business, say an accommodation owner, they may not rent out rooms anymore because they can't clean them. That's the sort of reality we could be facing.
David Alexander:
So it's piling extra pressure on employers, but it's employers that are the key to the wages future of workers. The only way that you're going to get sustainable wage growth in the economy is through thriving businesses. Thriving businesses employ people that are happy to pay the higher wages. When businesses are struggling, it's the opposite. There's no wage growth. So the whole approach should be make sure your businesses are thriving and they will deliver your sustainable wage outcomes. This approach is really the government issuing effectively an edict saying across the board, there's going to be this increase like it all lump it. And what that does is erode the competitiveness of businesses into the future. So they're les able to grow wages into the future.
Gary Hardgrave:
And David, I don't know anybody in any business with any brains that would not pay a good worker a good wage to keep them because it's expensive to replace people. But when you start to look at things like high inflation, fuel prices, interest rate hikes, capital gains changes, all of the additional cost burdens that automatically jack up on the 1st of July each year, it seems for fees and levies and other levels of government charges. And then there's no improvement to productivity. In other words, we're not getting a result that actually boosts the bottom line for the business. How the heck can small businesses keep operating in this country?
David Alexander:
Well, indeed. And what this decision does is continue a pattern of awarding outcomes that are delinked from productivity. So where you do have businesses that are becoming more productive, that's great. They're better able to sustain wage increases. But this is applied across the board. It's unlinked to productivity outcomes. And as we all know, productivity outcomes have been quite poor over a number of years. So it's part of the problem that the erosion of business productivity is feeding back into lesser wage outcomes. People are stroking their chin and thinking, what's this productivity problem that we've got? And part of it goes back to loading up businesses with all sorts of burdens, whether it's unsustainable forced wage cost increases or other things, red tape, high energy costs, et cetera. So they really should approach this in a different way, which is bring about thriving business sector and they will do the heavy lifting of creating wage growth in your economy through a sustainable natural process rather than trying to interfere and declaring from Fair Work Commission headquarters that this news agent must pay this and this restaurant pay this.
It's much more tailored for individual circumstances of small businesses.
Gary Hardgrave:
Well, I mean, let's face it, my plan would be less tax. So you'd have to drop the size of government because the only way to give a tax cut that's sustainable is to have less government spending. So get rid of the size of government. In fact, I boldly said last week, get rid of half the Canberra based bureaucracy. I don't care which half. The expensive half would be the thing I'd get rid of. But the Reserve Bank now, they're warning about higher labour costs flowing through to prices. So what do businesses do? The only way they can pay these wage increases is either have fewer staff frankly close their doors or their prices massively, but the Reserve Bank's saying, "Well, we're not happy about that either."
David Alexander:
Well, that's right. It's an invidious choice that these businesses are now facing. So wear it themselves in which case your future productivity is eroding or pass it on to customers, in which case inflation's just going to be fed again in the cycle. So the only solution is to look at ways to ensure that businesses are productive and competitive. I mean, if you get a booming business community, that will drive wage growth in a sustainable way. So it should be framed around not about lumping new requirements and burdens on business, but unleash the energy that they have and that can generate widespread economy wide lifts in wage outcomes. If you get your economy booming, that's how you get a genuine lift in broad prosperity.
Gary Hardgrave:
Well, let's face it, if the economy's booming and that broad prosperity occurs, government charges are more guaranteed, if you see what I mean, that government's income from profit, tax on profit would increase. But right now we're looking at probably tax deductions for loss. This is the reality that a lot of businesses are now facing. So what do we say given productivity growth is expected to stall? What do we say to the Fair Work Commission and government? What do we say to them? Stop spending money, stop taxing us so much and give us a chance to get ahead? I mean, what do you say to them, David Alexander?
David Alexander:
Well, one particular bill that's of concern for us coming up is on the capital gains tax changes and it's going to harvest an enormous amount of revenue and a large chunk of that is going to impact on business. It's rather like eating our future. It's weighing businesses down the very businesses that you want to create tomorrow's jobs. So why would you weigh down on this engine of prosperity? So it's very shortsighted. It's just lumping a new burden on business to harvest some revenue, but you're eroding their position over time. It's very shortsighted.
Gary Hardgrave:
And you throw in things like payday super requirements now, cashflow leaves small business, it's going to make it hard. I think a lot of small business owners are going to be feeding themselves a lot less as they try to sustain the prospect for business growth. But it's not a happy picture, David Alexander. I want to be upbeat, but I don't think we can do anything else other than deal with reality. Good to talk to you always. David Alexander, Chief of Policy and Advocacy at the Australia Chamber of Commerce and Industry.