National minimum wage increase hurts local businesses, Albany Chamber of Commerce and Industry president says

Albany Chamber of Commerce and Industry president Kerry Fry says increasing the tax-free threshold instead of the national minimum wage would support beleaguered local businesses. The national minimum wage has been increased by 5.2 per cent or $40 a week from July 1, taking it to a total of $812.60 a week at an hourly rate of $21.38. The Fair Work Commission, the independent body which sets the wage, announced the increase on June 15 when its annual wage review 2021–22 decision was delivered. Prime Minister Anthony Albanese has welcomed the decision after backing an increase of 5.1 per cent during the election campaign. The national minimum wage applies to employees not covered by an award or registered agreement, which includes up to 2.8 million workers. Mr Fry said labour costs were “generally the highest costs in operating a small business”. “So when one of the largest cost factors of your business increases, it doesn’t only increase from the wage point of view, it increases because your worker’s compensation will be higher, your superannuation will be higher, your payroll tax will be higher,” Ms Fry said. “For everybody, it is a significant cost increase for running their business, which will have a flow-on effect to the consumer having to pay more money for products and services.” She suggested that “rather than pushing on the cost to small businesses”, the Federal Government should increase the tax-free threshold. “Small businesses definitely want their employees to get a good pay for a good day’s work,” she said. “If you increase the income threshold, you’re actually providing money in the employees pocket, you’re not taking it away from the employers.” Ms Fry said the wage increase was the latest in a long line of pressures on local businesses. “Businesses at the moment are facing so many pressures, it’s not funny,” she said. “They have raised with me the further increase to the wages, and how that’s going to have to increase their prices to the consumer. “Along with everybody out on COVID, as well as not having enough houses for people who do want to move here and live and work, we’re in very difficult times at the moment.” The decision to increase the national minimum wage was criticised last month by national peak business bodies. The Australian Chamber of Commerce and Industry said the rise was too high, and would collectively cost small businesses $7.9 billion. Australian Retailers Association chief executive Paul Zahra warned the decision could tip some small businesses “over the edge”, while the National Retail Association blasted it as being “out of touch”. However, Mr Albanese said small businesses were reliant on workers who were all struggling with the cost of living. “It’s (the rise) $1 an hour,” Mr Albanese said on the day of the announcement. “It’s about whether people who are on the minimum wage should have a real wage cut and I haven’t had anyone not on the minimum wage argue that shouldn’t occur. “These people are really struggling and that’s why we opposed a real wage cut for people on the minimum wage — these are workers who keep those small businesses alive and deserve not to go backwards.” Workers on some hospitality, aviation and tourism awards will have to wait until October for the pay rise to come through after the commission determined exceptional circumstances existed.