Low-income earners could be thousands of dollars out of pocket if the Federal Government adopts recommendations made by the Commission of Audit.
Australia’s current minimum wage of $622.20 per week is high by international standards and should be contained to improve job opportunities, according to the report released on Thursday.
The national minimum wage, which is determined by Fair Work Commission, would be replaced with the ‘minimum wage benchmark’, set at 44 per cent of average weekly earnings and would be phased in over 10 years.
The commission considers the average weekly earnings to be $1105, and the minimum wage, if adjusted today, would drop to $486.
Gippsland Trades and Labour Council assistant secretary Steve Dodd said the change would be “totally outrageous”.
“It’s targeting people who can least afford to take a loss like that in regards to their take home pay,” Mr Dodd said.
“It will force even more people into more poverty.
“Our view is it’s not justified.”
Mr Dodd hit out at claims lowering the wage would improve job opportunities.
“That argument is totally without any basis. What they should be saying is ’employers want to make more profits’.”
Cafe owner Claudia Davies said she did not think lowering the minimum wage would affect her business.
“It could free up more money, but it probably wouldn’t make an impact, to me anyway – I wouldn’t pay my staff less,” Ms Davies said.
“A lot of people are studying hospitality now, maybe (lowering the minimum wage) would stop people wanting to go into hospitality.”
Taxpayers Australia’s head of tax Mark Chapman said the change would mean rather than minimum wage increasing in proportion to people’s earnings, it would widen the gap between the middle income earners and the poor.
“This is about pegging the minimum wage to a lower benchmark and increasing at a lower rate than the rate of earnings over all,” Mr Chapman said.
“Compared to everyone else (minimum wage earners) would drop back.”