Buck stops here with minimum wage on rise

Impact on Port Douglas businesses

Rowan Anderson

Journalist

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The minimum wage rise will add $7.9 billion in costs to the affected businesses over the year ahead. Image: supplied

Port Douglas business owners have been left to make changes to their operations with the recently announced increase of the minimum wage.

Rising cost of living and inflation were the key factors in the decision last week that saw the rate lifted by $1.05 an hour from its $20.33 base from July 1, an increase of 5.2 per cent, to $21.38 an hour.

Newsport spoke with some of the local business owners to get their thoughts on the decision. 

Chris Bower, owner of Zinc restaurant, commented on what the increase would mean to not only his business but many others.

“At a time like this, when inflation is so high a wage rise is the icing on the cake.

“In our industry, the food industry, we have seen in some cases up to a 100% cost increase on products, combined with rising superannuation, freight, electricity and gas it makes the impact a huge negative on small business. “

Mr Bower said that the decision would only lead to raising product prices and this would only make the cost issue worse.

Toast Port Douglas owner Luke Headland backed claims the rise would only lead to greater costs for his customers.

“While we accept the increase of the wage rate to keep up with the cost of living right now, we as a business will have to reflect this in our pricing to balance out those extra costs.”

Prime Minister Anthony Albanese made the minimum wage rise a pillar of his election campaign when he advocated for a pay rise of at least 5.1 per cent, in line with inflation.

Small business left to raise costs

The increase will impact small businesses who were greatly impacted by the pandemic with lockdowns and border closures.

The Council of Small Business Organisations Australia warned that this minimum wage hike of 5.1% would have a “huge impact” on these businesses already facing rising interest rates and cost pressures.

CEO of the organisation Alexi Boyd said many small businesses would struggle to lift wages by 5.1% while input costs and rents would continue to rise.

“Small businesses are just about to get back up on their feet, and they’re ready to make the most of a growing economy - this announcement is just another impediment to that growth.

“So many small businesses who employ younger people, who may not be paying super as yet, need to be ready for the fact that that super is going to come from the first dollar that they earn.”

Business warns pay rise will further stress sector

The Australian Chamber of Commerce, however, warns the decision will put businesses under more stress.

Andrew McKellar — the head of the peak representative group for business – commented on the decision and the impact on business and owners.

"This will add $7.9 billion in costs to the affected businesses over the year ahead, so that will be a very considerable burden that those businesses will either have to take to the bottom line or pass on to their customers.

"If we are to remain competitive, then, clearly, this is not a decision that will help in those circumstances."

The Australian Retailers Association said the lift in pay "could tip some businesses over the edge", and that economic recovery was still uncertain.

Paired with this rise to the minimum wage and booming cost of living prices the worst is yet to come for small business and customers alike.

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