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Australia’s minimum wage to rise by 5.75% , affecting nearly a quarter of workers

Australia’s Fair Work Commission has decided to raise the minimum wage by 5.75%, affecting about 2.67 million workers. This hike increases the hourly wage from $21.38 to $22.61, equivalent to a rise from $14.11 to $14.92 in U.S. dollars. The decision, which does not align with the current inflation rate, defies market expectations and has been met with varied responses from unions and business groups.

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SYDNEY, AUSTRALIA — The Fair Work Commission (FWC) of Australia has announced an increase in the national minimum wage by 5.75% from $21.38 to $22.61 per hour, equivalent to a rise from $14.11 to $14.92 in U.S. dollars.

This wage adjustment, set to take effect from the first full pay period on or after 1 July, will impact approximately one in four workers in the country, amounting to around 2.67 million people.

These annual wage adjustments result from a review process conducted from March to June and aim to set a safety net for the country’s workers.

However, this year’s pay rise has not been aligned with the inflation rate of 6.8% over the past 12 months, implying that the pay of the affected workers may not keep up with consumer prices.

Interestingly, this decision has defied market expectations, which predicted an increase of only 5%. Moreover, the 5.75% hike is higher than the 5.25% midpoint that falls between the 7% increase proposed by the Australian Council of Trade Unions and the 3.5% rise recommended by employer groups.

Australian unions have previously advocated for a 7% increase to lift the minimum wage to $22.88 per hour ($15.10 in U.S. dollars), implying an annual wage of $45,337. This proposition, however, has been met with opposition from business groups, warning of the potential for a “wage price spiral” that might escalate inflation.

FWC President Justice Adam Hatcher acknowledged the complexity of this year’s decision in light of the economic conditions. “Low unemployment, falling wages, and high inflation make for very unusual economic circumstances,” Justice Hatcher commented.

He further highlighted that the FWC’s annual wage review process is not a competition between proposals but a statutory duty to establish a safety net for workers. The decision does take into account the unique challenges posed by the predicted economic slowdown over the upcoming year.

The Australian Chamber of Commerce and Industry reacted with disappointment to the FWC’s decision. Chief Executive Andrew McKellar expressed surprise at the Commission’s assurance that the wage increase would not contribute to a wage-price spiral. He emphasised that such a rise in wages added to the already mounting pressure on business margins and prices.

The Labor party, led by the Albanese government, had been advocating for wage rises in line with inflation for two consecutive years. Although their submission to the FWC’s 2023 wage review did not specify a desired increase, it emphasized that low-paid workers should not be left behind in real terms.

Employment Minister Tony Burke, highlighting the gender disparity among low-income earners, stated that this wage review would be the first to include the objective of gender equality. The submission, however, did not recommend that wages should automatically be adjusted with inflation. It noted that inflation should not be the only factor considered by the FWC in setting wages.

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Australia

Heatwave fuels bushfire risk in Australia’s east

Australia’s eastern seaboard battles high spring temperatures, reminiscent of the perilous 2019-2020 bushfire season, signaling an ominous start to the summer ahead. Sydney and New South Wales face severe fire risks.

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SYDNEY, AUSTRALIA — Australia’s eastern seaboard sweltered Tuesday in unusually warm spring temperatures, with hot winds whipping up some of the riskiest bushfire conditions since the 2019-2020 “Black Summer” catastrophe.

Soaring temperatures in parts of New South Wales have climbed as high as 34 degrees Celsius, more than 10 degrees above the average high for this time of year.

Children have been sent home from 21 schools in a coastal region 500 kilometres (310 miles) south of Sydney, where firefighters think the most volatile conditions will be felt.

“Due to stronger than forecast winds along the far South Coast, catastrophic fire danger is expected this afternoon in the region,” the New South Wales Rural Fire Service said in a statement on Tuesday.

“These are the most dangerous conditions for a fire.”

Sydney Harbour was last week shrouded in a smoky haze, as firefighters on the city’s fringes lit controlled blazes to deprive bushfires of fuel ahead of a hot and dry summer.

The Spring heatwave sweeping over eastern Australia comes on the back of the country’s warmest winter since records began in 1910.

After several wet years, experts are expecting the coming summer to bring the most intense bushfire season since 2019-2020.

During that “Black Summer”, bushfires raged across Australia’s eastern seaboard, razing swathes of forest, killing millions of animals, and blanketing cities in noxious smoke.

July 2023, marked by heatwaves and fires around the world, was the hottest month ever registered on Earth, according to the European Union’s climate observatory Copernicus.

— AFP

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Major disruption looms as Chevron workers in Australia halt three plants operation

Hundreds of workers at Chevron’s Western Australia LNG plants have ceased operations, affecting 6% of global LNG supply. Union negotiations on pay and conditions have stalled, leading to short work stoppages and bans. The labour action may escalate, posing potential energy security risks.

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AUSTRALIA: In Western Australia, hundreds of workers at Chevron’s liquefied natural gas (LNG) plants brought operations to a standstill, impacting about 6% of the world’s LNG supply.

At 1 pm local time, about 500 employees initiated short work stoppages and work bans due to stalled union negotiations concerning pay and working conditions.

The labour action is scheduled to continue until Thursday, with the potential for escalating rolling strikes lasting up to 24 hours a day for two weeks if an agreement is not reached.

The Offshore Alliance, a collaboration of two energy worker unions, is overseeing the strike at Chevron’s Gorgon and Wheatstone onshore processing plants and its Wheatstone offshore platform.

Negotiations between Chevron and the unions, ongoing for two years, have hit an impasse on various issues, including pay, job security, scheduling, and work classification transparency.

The labour action is described as “protected industrial action” in response to Chevron’s reluctance to accept an industry-standard enterprise agreement for these facilities, according to a union spokesman.

Chevron maintains that it has negotiated in good faith but acknowledges that key terms remain unresolved. The company plans to ensure safe and reliable operations in case of disruptions at its facilities.

Gorgon and Wheatstone jointly produce approximately 25 million metric tons of LNG annually.

This labour dispute follows a recent strike avoidance at the neighboring Energy’s North West Shelf facility, contributing to volatility in European gas prices in recent weeks.

Energy analysts express concern that such strikes could impact global energy security, given increased reliance on global LNG supplies due to Russia’s reduced natural gas supply to Europe following its invasion of Ukraine.

While there are pressures to resolve the issue, potential disruptions are closely monitored by the energy industry.

Energy analyst Saul Kavonic said the talk of strikes had put gas traders in Europe “on edge” because of the shortage in natural gas supplies that Russia’s invasion of Ukraine had created.

In the wake of that invasion, Russia curtailed its supply of natural gas to Europe, making nations there significantly more reliant on global LNG supplies, he said.

“Any supply disruptions now can have very serious consequences for energy security in both Asia and Europe because those markets are now super interconnected,” Kavonic quoted by The New York Times.

But he said it was “still very premature” to believe that the strike at Chevron’s facilities would lead to any serious disruption in global production of the fuel.

“There’s a huge amount of pressure involved here behind the scenes on both the company and the unions to not let this escalate.

“The Australian government doesn’t want to see its reputation for reliability as an energy supplier tarnished further,” Kavonic said.

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