The Fair Pay Commission’s excessive increase to the new minimum wage will cost jobs, and lead to higher inflation said the Victorian Automobile Chamber of Commerce (VACC).

VACC Industrial Relations General Manager, Kevin Redfern, said while VACC didn’t oppose a modest increase to minimum wage rates, the 5.6 per cent increase would cost business around $2 billion per year and the cost of this increase would have to be passed on to consumers.

“The 5.6 per cent increase handed down by the Fair Pay Commission to minimum rates can hardly be categorised as modest,” Mr Redfern said.

“VACC clearly defined the thin profit margins existing across the retail motor industry and the pressures on small business generally in a submission to the Fair Pay Commission.

“This economic data which supported our submission,” he said.

“Employers in the retail automotive sector are facing declining local economies, higher fuel and telecommunications costs, and now, severe drought conditions.

“These higher wages will not help these country regions and the local employers who are already facing tough times.”

“While the Trade Union movement and the Commonwealth Government are pleased with the level of increase – employers are certainly not.”

Mr Redfern said there was an old saying that one person’s wage adjustment is another person’s job. 

“The Fair Pay Commission’s ruling is likely to prove the truth of that saying – it will cost jobs, lead to higher inflation and requires no increase in productivity,” he said.