Annual Wage Review – 2.5% awarded
On 17 June, the Fair Work Commission delivered the annual wage decision and set in place the increasing of all awards by 2.5%.
As much as most of our schools have Enterprise Agreements, and the 2.5% will not flow on, it does put paid to the arguments from some schools for sub 1% increases due to economic circumstances.
The Department for Education increases of 2.35% pa look modest against the National Wage 2.5%.
The Commission found that the Australian economy has recovered to a greater extent and more quickly than anticipated.
Stronger economic performance over the latter part of 2020 has improved the baseline forecast scenario published in the RBA’s May 2021 Statement on Monetary Policy, even from the February 2021 Statement, including:
- GDP growth revised up from 8 per cent to 9¼ per cent over the year to the June quarter 2021 and from 3½ per cent to 4¾ per cent over the year to the December quarter 2021.
- Household consumption revised up from 14 per cent to 15½ per cent over the year to the June quarter 2021 and from 4 per cent to 5½ per cent over the year to the December quarter 2021.
- The unemployment rate revised down from 6½ per cent to 5¼ per cent for June 2021 and from 6 per cent to 5 per cent for December 2021.
- The Consumer Price Index (CPI) revised up from 3 per cent to 3¼ per cent for the June quarter 2021 and from 1½ per cent to 1¾ per cent for December 2021. The increase was largely caused by the unwinding of government support measures, such as free child care.18 Trimmed mean inflation was also revised up from 1¼ per cent to 1½ per cent for both the June and December quarters 2021.
- Growth in the Wage Price Index (WPI) revised up from 1 per cent to 1½ per cent for the June quarter 2021 and from 1½ per cent to 1¾ per cent for the December quarter 2021.
With the 2021–22 Budget released in May 2021, changes to forecasts of key economic indicators also underscore the improved assessment of the Australian economy over this time. In particular, there were improved forecasts over 2020–21 for:
- real GDP growth, revised up from ¾ per cent to 1¼ per cent;
- household consumption, revised up from ½ per cent to 1¼ per cent;
- non-mining business investment, revised up from –11 per cent to –6½ per cent;
- the CPI, revised up from 2¼ per cent to 3½ per cent;
- employment growth, revised up from 4 per cent to 6½ per cent; and
- the unemployment rate, revised down from 7¼ per cent to 5½ per cent.
The FWC Panel took the 0.5 percentage point increase in the Superannuation Guarantee rate into account in determining the level of increase in minimum wages in this Review, but has not applied a direct, quantifiable, discount to the minimum wage increase.
Taken overall, the change in circumstances—the markedly better economic environment, the scheduled SG increase and the tax-transfer changes—weigh in favour of a higher increase than was awarded in last year’s Review.
The 15 page summary of the decision can be found at
The full 103 page decision can be found at