All sides claim victory - almost

The newly established Fair Pay Commission has made its first determination (reasons for the decisions are here), agreeing to increase minimum wages by around $27 a week. This decision has been curiously welcomed by most parties, unions and the Federal Government particularly, albeit for different reasons.

The ACTU are happy because they'd asked for $30 per week and nearly got there. The Feds are happy because they can claim that their new system is working when its critics, including the ACTU, said it wouldn't.

Employers - well Peter Hendy of ACCI predicts the sky will fall in: pressure on inflation and interest rates and no increase in labour market participation (a more orthodox interpretation is impossible). Heather Ridout of the AiGroup is, as ever, far more sensible however she too notes the risks drawing attention to the likely differential impacts on small to medium enterprises and regional economies. Interestingly, the Commission specifically considered and rejected the option to differentiate the rates for either regions or for industries however, this in part reflects the Commission's mandate to eliminate pay differentials between States over the next three years.