Starting from 1 July 2025, the National Minimum Wage will increase by:
- $0.85 to $24.95 per hour
- $32.10 to $948.00 per 38-hour week
- $1,669.20 to $49,296.00 per year.
This decision impacts up to 2.9 million Australian workers whose pay is set by minimum awards or the national baseline wage. These workers are often employed in sectors like accommodation, food services, healthcare, retail, and social assistance. Many are women, part-time employees, or casual workers—making the wage increase especially significant in advancing pay equity.
The 3.5% wage rise is 1.1% above the current inflation rate of 2.4%, meaning it delivers a real wage increase—not just a numerical one. According to the Fair Work Commission, this decision helps reverse the 4.5% real wage decline award-dependent employees have experienced since July 2021.
With inflation now stabilising within the Reserve Bank of Australia’s 2–3% target range, the Commission has taken this opportunity to correct the declining wage value and prevent long-term entrenchment of lower living standards.
The Albanese Government backed the decision, describing it as economically sustainable and morally just. Minister for Employment and Workplace Relations, Amanda Rishworth, called it a “win for workers,” offering much-needed relief to Australians facing high living costs.
Treasurer Jim Chalmers added that the decision aligns with Australia’s broader economic progress: real wages are now growing, inflation is easing, unemployment remains low, and interest rates are beginning to fall.
Unions such as the Australian Council of Trade Unions (ACTU) praised the outcome, having advocated for an increase of up to 4.5%. ACTU Secretary Sally McManus noted that the Fair Work Commission recognised the urgent need for low-paid workers to “start catching up for what was lost during the inflation spike.”
Business Groups Voice Concerns
Not everyone welcomed the increase. Business groups, including the Australian Chamber of Commerce and Industry and the Council of Small Business Organisations Australia (COSBOA), expressed concerns about the added cost burden. Small business owners, many already grappling with rising expenses in rent, energy, insurance, and input costs, now face higher payroll tax, superannuation contributions, and insurance premiums as a result of the increase.
However, supporters of the decision argue that fairer wages can lead to better staff retention, increased consumer spending, and ultimately, a stronger economy.
Since Labor came to power in 2022, the National Minimum Wage has grown by:
- $4.62 per hour,
- Over $175 per week, and
- More than $9,120 per year,
which equates to a 7% increase over three years.
This marks a stark contrast to the stagnation seen under the previous government, where real wages declined for five consecutive quarters before the 2022 election. For 18 months in a row under the Albanese government, annual real wages have shown consistent growth.
This decision is not just a win for existing workers—it holds positive implications for multiple groups:
- Aspiring Migrants: For those looking to move to Australia, this increase signals a fairer and more secure labour market. A higher minimum wage ensures better living standards and safeguards for migrant workers who may start in award-dependent roles.
- Current Residents: For people already in the country—especially casual and part-time employees—the increase offers vital relief from mounting living costs and better prospects for financial stability.
- Australia’s Workforce at Large: A thriving low-wage sector supports wider economic growth by boosting household consumption. When low-paid workers earn more, they spend more, which in turn stimulates local businesses and helps maintain economic momentum.
The Fair Work Commission’s 3.5% wage increase is more than just a number—it’s a statement. It acknowledges the hardships faced by Australia’s lowest-paid workers, corrects years of wage stagnation, and sets the tone for a more equitable economic future. Whether you’re a jobseeker, a working parent, a new arrival to Australia, or a long-term resident, this is a timely and welcome step towards fairer pay and a fairer Australia.
