Minimum wage to lift by 6 per cent, award rate by 4.75 per cent

The Fair Work Commission has increased the National Minimum Wage from $24.95 per hour to $26.44 per hour. (ABC News: Sam Ikin)

The Fair Work Commission has increased the national minimum wage by 6 per cent and modern award wages by 4.75 per cent.

Australian unions are happy with the decision but businesses are disappointed.

Some economists say the decision will not have a material impact on inflation, but others think it could increase price pressures and force the Reserve Bank to lift interest rates again.

Australia's minimum wage will increase by 5.97 per cent, and minimum award workers will get a 4.75 per cent pay boost, in the Fair Work Commission's (FWC) annual wage review.

The new national minimum wage will be $26.44 per hour (up from $24.95), and $1,004.90 per week (up from $948), based on a full-time 38-hour week.

The pay increase will begin on July 1 for millions of low-paid workers.

While the national minimum wage covers a very small proportion of the workforce, about 21 per cent of all employees in Australia are paid at a minimum award rate, amounting to almost 2.8 million people.

Disability support worker Lika Taufa described the wage rise as a "win" for workers like her in the community services sector.

Lika Taufa says the wage rise will help pay for everyday living costs. (ABC News: John Gunn)

"It's not the easiest of jobs," she told ABC News at a union rally in Sydney.

"This will definitely assist with the everyday costs that a lot of people in the industry are facing.

"It'll give me an opportunity to be able to not only afford my daily living costs but to be able to spoil my kids, too."

According to the FWC, because of the part-time and low-paid characteristics of the modern award-reliant workforce, the wages paid to them constitute only about 11.2 per cent of the national "wage bill".

Workers reliant on award wages are disproportionately female, more than two-thirds work part-time hours, more than half are casual employees and more than a third are low-paid.

In its submission to the Fair Work Commission's annual wage review, the government again calls for the lowest-paid workers to not go backwards.

Four industry sectors — accommodation and food services, health care and social assistance, retail trade, and administrative and support services — account for more than two-thirds of all modern award-reliant employees.

Each year, the FWC takes submissions from government, business groups and unions before making its own wage determination.

The Albanese government had pushed for an above-inflation pay rise for the national m