This will ensure that the real wages of workers on award wages will rise at a time when the overall real wages of all Australian workers are also recovering.
The cost-of-living increases of the past three years have been most acutely felt by those on low incomes - especially due to sharp increases in rents and mortgages.
This will provide some much-needed relief.
Australia Institute research shows the real value of award wages has fallen nearly 4% below September 2020 levels. This increase will still see award wages 1% lower than they were five years ago.
"Our research has shown that over the past 30 years, there has been no connection between increases in award wages and inflation," said Greg Jericho, Chief Economist at The Australia Institute.
"As a result, any claims from business groups that this will drive inflation are without foundation."
