Australian Workers Receive 3.5% Pay Increase as Government Cost-of-Living Package Takes Effect

Three million Australian workers received a 3.5% pay increase Monday as a comprehensive cost-of-living relief package took effect, delivering the largest wage boost to minimum and award wage earners in recent years.

Prime Minister Anthony Albanese announced the measures during morning television interviews, emphasizing the immediate impact on Australia's lowest-paid workers as the country enters the new financial year.

"There's three million Australians will get a 3.5% pay increase, and they're people on the minimum wage or on award wages, they're some of the lowest paid people," Albanese said during an appearance on News Breakfast. "So that will make a difference because we know people are doing it tough."

The wage increase, determined by the Fair Work Commission following government submissions, represents a significant boost for workers earning minimum wages or those covered by industrial awards. With inflation currently at 2.1%, the increase delivers a real wage gain of approximately 1.4%.

The pay rise headlines a broader package of cost-of-living measures that began July 1, including an expansion of paid parental leave and the introduction of superannuation payments for new parents.

Parental Leave Expansion Targets Gender Retirement Gap

Under the new arrangements, paid parental leave increases by two weeks to 24 weeks total, with plans to reach 26 weeks and eventually six months by next year. For the first time, the government will pay superannuation contributions during parental leave periods.

"It will make an enormous difference to the retirement incomes of women particularly," Albanese said. "We know that women retire with much less in their superannuation accounts, and this is one of the reasons."

The superannuation measure addresses a significant gap in Australia's retirement savings system, where women consistently retire with substantially lower balances than men due to career interruptions for child-rearing.

Additional Relief Measures Target Multiple Sectors

The July 1 package includes several other targeted measures designed to reduce household expenses and support economic participation. Students undertaking practical placements in teaching, nursing and social work will receive payment for the first time through the new "paid prac" program.

Households with solar panels can access a 30% rebate on battery installations, designed to permanently reduce electricity bills. This complements existing $150 household energy rebates that also began Monday.

Small businesses gain access to a $20,000 instant asset write-off, allowing immediate tax deductions for equipment purchases. The measure aims to encourage business investment and support economic growth.

Construction apprentices will receive $10,000 incentives as part of the government's housing supply strategy. Albanese noted similar success with energy sector apprenticeships, where 11,000 people have taken up new positions.

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