Australians are owed a decent wage and should be proud of having one of the highest minimum wages in the country, acting prime minister Michael McCormack says.
The Fair Work Commission announced on Wednesday the national minimum wage will rise 2.5 per cent to $772.60 per week or $20.33 an hour.
The decision has been slammed by business groups as being unaffordable during a pandemic, and criticised by unions as not being generous enough to the workers who led the country through COVID-19
"People who work should be paid a fair and decent wage," Mr McCormack told parliament on Thursday.
"That is why we have the highest minimum wage in the world and we should be proud of that."
Labor quizzed him about a fruit picker called Kate who worked seven days a week and was paid on "piece rates", but had to scrounge for food in supermarket rubbish bins.
"Our government has zero tolerance for any exploitation of workers," Mr McCormack said.
He acknowledged some businesses had trouble navigating the complex system that was also in place under a Labor government and said there were extensive safeguards in place for workers.
Treasurer Josh Frydenberg said the commission had made it clear the economy was recovering more quickly than expected.
"We welcome the increase, it means a real wage increase for more than two million," he said.
"It comes on top of the tax cuts we have provided which will help boost household disposable income through this crisis."
Reserve Bank Governor Philip Lowe sounded a warning on sluggish wages more broadly as Australia begins to bounce back from the pandemic-driven recession.
In his first public appearance since March, Dr Lowe told a farming audience in Toowoomba that even in those pockets where firms are finding it hardest to hire workers, wage increases are mostly modest.
The RBA says wage growth needs to double from its current low rate of 1.5 per cent to get inflation back to normal.
The treasurer noted the wage decision was roughly in the middle of the Australian Industry Group's submission for a 1.1 per cent increase and a 3.5 per cent rise sought by the ACTU.
Most workers on the national minimum wage will see the $18.80-a-week increase from July 1.
However, general retail award workers will have to wait until September 1 and aviation, fitness, tourism and certain retail sector awards will have their pay rise from November 1.
Australian Council of Trade Unions secretary Sally McManus criticised the decision to delay the rise in some sectors, especially those who have worked throughout the pandemic and whose employers have posted record profits.
