COVID-19 Updates

Wage Increase A Hit To Small Business

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The National Road Transport Association (NatRoad) believes that the decision of the Fair Work Commission (FWC) relating to the Annual Wage Review 2020-21 has gone too far. While the FWC has rejected the 3.5% wage increase sought by the Australian Council of Trade Unions (ACTU), an increase of 2.5% together with the superannuation increase from 1 July 2021 is a big hit to small businesses.

The National Minimum Wage will increase by 2.5% to $772.60 per week or $20.33 per hour, effective from the first full pay period on or after 1 July 2021. Modern award wages will increase by 2.5%.

However, the FWC has decided that continuing exceptional circumstances exist to justify the deferral of the wage increase in certain industries. As a result, the 2.5% increase to wages in a limited number of modern awards will apply from 1 November 2021.

The Road Transport and Distribution Award 2020 and the Road Transport (Long Distance Operations) Award 2020 are not part of the group of modern awards with a deferred increase so the operative date of the increase will be from the first full pay period on or after 1 July 2021.

“NatRoad has been calling for a cautious approach to wage increases, given the uncertainties in the domestic and international economic outlook,” Mr Warren Clark, NatRoad CEO said.

“The impact of this wage increase on employers should not be underestimated, especially with small businesses’ limited capacity to pass on price increases in the road transport industry.

“The extent of the increase is likely to poorly affect the number of people in work and reduce the number of hours offered by employers, especially to young people.  This industry wants to attract younger workers, but this increase will have the opposite effect.

“The road transport industry is an industry where margins are tight and contract price rises are suppressed. A number of members will therefore struggle to meet the increased wage bill imposed by this decision which is based on a rosy economic outlook,” Mr Clark concluded.

About NatRoad

With a proud history dating back to 1948, NatRoad operates to represent its members and as advocates for the $96 billion road freight industry. With more than 45,000 trucking companies employing more than 140,000 people across the country, the road transport industry is one of Australia’s biggest economic drivers.

NatRoad is a not-for-profit Association that is 100% funded via its membership fees and business partnerships. No funding is provided by government or unions. We know the road transport industry. Our board is made up of individuals who run transport businesses and have members from owner-drivers to road freight and large fleet operators, representing all aspects of the industry. General freight, road trains, livestock, tippers, express, car carriers, as well as tankers and refrigerated operators.

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