Retailers wary of minimum wage, super boost impact on overheads

(Source: Bigstock)

Retailers are wary of higher costs of doing business after the Fair Work Commission declared a 3.75 per cent increase in modern award rates on top of the scheduled 0.5 per cent increase in Superannuation Guarantee Rate.

The increase will result in 4.25 per cent higher wages for staff of some businesses, effective July 1.

“With discretionary spending slowing and operating costs rising across the board, wage increases without productivity improvements place businesses, particularly small businesses under significant pressure and can ultimately lead to price increases,” said Paul Zahra, Australian Retailers Association (ARA) CEO.

“Wage growth is important; however, we have consistently advocated that any increase must reflect the context of inflation moderating, the decline of labour productivity, and the cost-of-doing business challenges.”

The Fair Work Commission said the increase is in line with the forecast wage growth across the economy for this year. The increase is expected to make a modest contribution to the total amount of wage growth for the year.

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