Ahead of the Fair Work Commission’s annual wage review decision today, the nation’s largest business network, the Australian Chamber of Commerce and Industry, has renewed its call for a cautious and calibrated wage increase of 4 per cent.

ACCI’s proposal would lift the minimum wage to $841.04 a week, with 3.5 per cent directed to ordinary earnings and 0.5 per cent directed to the expected superannuation increase from July 1.

“Business supports a pay increase. But to avoid more pain in the long run, it must be responsible,” ACCI chief executive Andrew McKellar said.

“Unsustainable wage claims will only exacerbate the problem in the long run for households, not help.

“The commission must reject the populist calls by the ACTU for an inflation matching increase. This only risks embedding inflationary pressures and inflationary expectations, in turn, setting off another round of rate increases.

“Already burdened by rising mortgage repayments, Australian families would endure additional financial stress and falling living standards if we keep stoking the inflation fire.

“It is small business that will suffer at the hands of an out-of-control wages bill, not large corporations. The idea that small business is rolling in riches is laughable.

“With fresh inflation data showing price pressures remain stubbornly high, a wages breakout at this time risk further fuelling inflation, interest rate rises and an excessive increase in unemployment. Now is not the time to adopt that irresponsible approach.

“The Australian economy is also facing an increasingly sombre outlook over the next two years. Warnings from the Reserve Bank and Treasury have revealed expectations of faltering economic growth, anaemic business investment, tighter household spending and rising unemployment.

“Granted the demonstrable deterioration of economic conditions and objective of returning inflation to the Reserve Bank’s 2-3 per cent target range, it is imperative that the panel exercise caution in its decision today.”