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Bill Shorten handballs living wage amount to Fair Work Commission

The national minimum wage will be converted to a higher “living wage” if Labor wins the Federal election, benefiting about 1.2 million workers.

Opposition Leader Bill Shorten has confirmed if he becomes prime minister he will increase the minimum wage as soon as practicable.

However, he has not specified by how much the minimum wage will have to increase to become a “living wage” — instead, he will hand responsibility for determining the living wage to the Fair Work Commission.

Mr Shorten will also ask the FWC to consider the time frame over which the increase should be phased in, taking account of the capacity of businesses to pay and the potential impact on employment.

The Australian Council of Trade Unions believes the minimum wage — currently $18.93 an hour — needs to be lifted 10.7 per cent over two years to prevent full-time workers falling into poverty.

Mr Shorten says the Fair Work Commission’s first living wage case will take place as part of its next Annual Wage Review after the necessary legislation passes Parliament, with wage increases to be responsibly phased in from the July 1 after that review.

He also says the living wage will not automatically flow through to award wages – it will only apply to those receiving the National Minimum Wage.

The Annual Wage Review will still determine award wages.

“We will fix the law so that the Fair Work Commission has the tools to deliver a living wage for Australia’s low-paid workers,” Mr Shorten said.

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