Millions of Australian workers are set to get a wage rise in July after the government confirmed in the Budget it supports increasing the minimum wage above inflation.
Earlier this year, the Albanese government submitted to the Fair Work Commission that this year's minimum wage increase should exceed inflation, but stopped short of nominating a specific percentage.
The position was formally confirmed in Budget papers released on Tuesday.
The confirmation comes as the ACTU lifts its minimum wage claim to 6 per cent after the Budget forecast higher inflation, having originally called for a 5 per cent increase.
If the Fair Work Commission approves the 6 per cent increase in June, the minimum wage would rise from $24.95 an hour to $26.45 an hour.
Any increase handed down by the commission would flow through to modern award rates, affecting millions more workers across sectors including retail, hospitality and care.
ACTU secretary Sally McManus said workers should not go backwards because of Donald Trump's war.
'When unions made our initial wage claim in March, inflation was only predicted to be 4.2 per cent. Now it is expected to hit at least 5 per cent. But the truth is no one knows what will happen with oil prices and inflation could be even higher.
Earlier this year, the Albanese government submitted to the Fair Work Commission that this year's minimum wage increase should exceed inflation, but stopped short of nominating a specific percentage
ACTU secretary Sally McManus (pictured) said inflation is eating into household budgets
'The lowest-paid workers spend every cent they earn. No one can save when on minimum wages.
'When wages fail to keep up with rising costs, people have no option but to cut back on the essentials like food and doctors' visits. This should be unacceptable to everyone.'
But Australian Chamber of Commerce and Industry acting chief executive David Alexander said the wage increase would be reckless and would cost businesses $14.7 billion.
'Calls for wage increases of 6 per cent are reckless and risk throwing more fuel on the inflation fire,' he said.
Business Council chief executive Bran Black said wage claims needed to reflect productivity gains.
'We want Australians to earn more and, as the Treasurer said in his budget speech, 'to lift wages and living standards we have to lift productivity',' he said. 'In an uncertain global environment, that case becomes stronger, not weaker.'