OVER 2.5 million Australian workers, including those located in NSW are set to receive a wage increase over the next few months.

While unions and the recently elected federal government have praised the move, regional business owners and bodies wonder if priorities are in the right place to benefit the Australian economy.

Earlier today (Wednesday 15 June), the Fair Work Commission announced that it would raise the National Minimum Wage by 5.2 per cent and modern award minimum wage rates by 4.6 per cent.

The National Minimum Wage applies to employees who are not covered by an award or registered agreement with their employer. This is the minimum pay rate provided by the Fair Work Act 2009 and is reviewed each year.

The decision will put an extra $40 a week in the pocket of a full-time worker on the minimum wage, up going up just over a dollar an hour, from the current hourly rate of $20.33 to $21.38.

Several have since come out to praise the announcement, including newly elected Prime Minister Anthony Albanese, who said it was in line with his election promise to help wages match the recently increased inflation rate of 5.1 per cent.

“Many of those people who are on the minimum wage are the heroes who saw us through the pandemic," Mr Albanese said at a press conference in Gladstone earlier today.

"These workers deserve more than our thanks, they deserve a pay rise and today, they’ve got it.”

Unions were also pleased with the increase, with the Australian Council of Trade Unions (ACTU) claiming around 2.67 million Australians who are not paid in line with an industry award would directly benefit from the wage increase.

“The union movement fought hard for this increase, standing up for the quarter of Australian workers who rely on this process for a pay rise," ACTU Secretary Sally McManus said.

However, Ms McManus also pointed out that because the annual process only benefits one in four workers, and wage growth needed to be seen across the economy.

"Clearly the current system is failing. It is unable to deliver wage increases despite low unemployment, high productivity and high profits," she said.

"Our country needs to take a fresh look at this problem and address it. It is not acceptable that working Australians and their families continue to go backwards while big business does so well."

Meanwhile, on the other end of the argument, business representatives have said the wage increase will put pressure on small businesses at a time when the cost of doing business is already rising.

Business NSW Regional Manager for Western NSW Vikki Seccombe said the organisation had previously advocated for a three per cent increase on top of the 0.5 per cent rise to the Superannuation Guarantee and was disappointed the Commission hadn't thought this was a fair compromise.

"We know from our regular Business Conditions Surveys that the costs of doing business are a major concern for business owners, and this will only add to their worries,” Ms Seccombe said.

“Business NSW estimates today’s ruling equates to around a $2.5 billion increase in annual costs to NSW businesses. It’s easy to forget that 98% of all businesses in NSW are classified as small businesses.

“This increase is going to take the wind out of the sails of a number of business owners. Despite what many think, no industry has fully bounced back from the ravages of the COVID pandemic, and business owners are battling to open their doors each day."

For regional supermarket owner Robert Khan, who has several stores, including in communities like Cobar, Bourke, Coonamble and Lightning Ridge, his business was already suffering due to increases in fuel costs this year.

While Mr Khan said the wage increase would not apply to him and a lot of regional retail employers, since most already paid above award in order to attract workers, he believes the government did not have their priorities straight in improving the Australian economy.

"In my opinion, fixing wages is not going to be a solution, the government should instead be controlling the cost of fuel and interest rates, they're the two main points," Mr Khan said.

"A lot of people are talking about how grocery prices have gone up like lettuce, cucumbers and meat, but that's all seasonal and is going to get better. Fuel and interest rates are not without government support."

While the increase will take effect for most awards from Friday 1 July, the Commission has given the Tourism, Hospitality and Aviation sectors a bit of breathing room, commencing from Saturday 1 October instead.