Home builders argue against wage hike to boost apprentice numbers

Jarrod
By Jarrod
4 Min Read

Builders want annual wage bargaining to take into account the steep cost of training apprentices for small businesses nurturing the next generation of tradies.

The Fair Work Commission’s annual review of the nation’s minimum and award wages is underway this week, with many expecting to see a significant pay bump for Aussies wedged in the lower tax brackets bearing the brunt of the cost of living crisis. 

However, with no end to the construction sector’s labour shortages in sight, Australia’s peak housing construction body, the Housing Industry Association (HIA), has urged the commission to factor in the already significant cost training apprentices have for small businesses. 

“Small businesses in the industry with a turnover of less than $500,000 employ a large proportion of apprentices,” the HIA’s submission says.

“Wage increases undoubtedly affect the capacity of businesses, particularly small business, to sustain the continued employment of apprentices to obtain completion status, leading to the eventual heightening of skills shortages in the industry.

“Any minimum wage increase should consider the pipeline of works and the outlook for the industry, to ensure that businesses could continue to employ their workers.”

The group claims that these smaller businesses are the ones hit hardest by the changing economic conditions over the last few years and already rely heavily on award rates of pay. 

The submission also said that the increased cost of doing business would deter businesses from hiring and training more employees, hurting the supply of skilled workers at a time when Australia needs them most in the lead-up to the nation’s 1.2 million home-building initiative.  

“Increases in wages inherently place added cost pressures on businesses making them less likely to grow, invest or take on additional employees,” said the submission. 

“This can also create demand-side implications including tightening the supply of existing skilled trades and reducing the entry of new apprentices to the industry placing further pressure on existing businesses to meet demand.”

The Australian Chamber of Commerce and Industry is also recommending an increase of no more than two per cent and the Australian Industry Group would prefer less than a 2.8 per cent lift.

Low-paid workers are feeling the pinch

Despite this, unions and the federal government remain worried about the impact cost-of-living pressures have on Australia’s lowest-paid workers, with many recommending a five per cent increase to allow workers to get ahead. 

In a formal submission, the government confirmed it was sticking with the same recommendation as the past two decisions, calling for the wages of low-paid workers to not go backwards.

Currently, the minimum wage sits at $23.23 per hour, or about $45,900 a year.

Workplace Relations Minister Tony Burke and Treasurer Jim Chalmers said people were still doing it tough.

“Low-paid workers – who are disproportionately women – are particularly affected by cost-of-living pressures because they typically do not have savings to draw on to cover rising costs,” they said in a statement. 

“Our government’s support for low-paid workers in the annual wage review has been an essential part of returning to real wages growth.”

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Jarrod
By Jarrod
Jarrod Brown combines his background in journalism, copywriting and digital marketing with a lifelong passion for storytelling. He has a strong passion for new and emerging consumer technology within the building sector. He lives on the Sunshine Coast - usually found glued to the deck of a surfboard.