The Papua New Guinea Government has endorsed an increase in the country’s minimum wage of 91 toea to K3.20 per hour.

Prime Minister Peter O’Neill announced on his website last Friday that Cabinet had approved the Minimum Wages Board’s recommendation of K3.20 from the previous K2.29 per hour.

If implemented, it represents a 40 per cent increase in the minimum wage.

For those who work 40 hours a week, it will mean a rise of K36.40 per week to K128 (US$47.14).

The news was welcomed by the PNG Trade Union Congress (PNGTUC), which represents more than 70,000 minimum wage workers throughout the country.

‘It’s a really big, big increase … and not what the business sector was wanting.’

‘In terms of wages in PNG, this has to be one of the sweetest achievement of my entire career in the union movement as I’m sure it is for minimum wage earners and workers,’ PNGTUC General Secretary John Paska was quoted in the Prime Minister’s media release.

The decision is expected to be gazetted by the end of this week, according to the chair of the Wages Board, Beverley Doiwa. But business leaders contacted by Business Advantage PNG said they had not been notified of the Cabinet decision.

‘Confusing’

The announcement was ‘premature’ and ‘confusing’, said Ron Seddon, President of the Port Moresby Chamber of Commerce and Industry.

‘It is our understanding at POMCCI that the long and exhaustive national deliberations of the Minimum Wages Board have been presented to Government. We note the statement from Government, however we understand there is still a large part of the due process to go through before this becomes law.

‘We have received nothing officially from the Minimum Wages Board to say that this is what we (the MWB) have agreed to,’ he told Business Advantage PNG.

‘It’s a really big, big increase,’ he said, ‘and not what the business sector was wanting.

‘It will put significant pressure on all business, particularly companies like the big security companies and plantations with a high number of employees.

‘It will affect people in the rural sector, for example the oil palm industry.

‘Lots of employers in the National Capital District are already paying K3.20 and their employees may want to factor that into a call for an increase themselves, so it will have repercussions.’

Further increases?

Labour and Industrial Relations Minister Benjamin Poponawa said in a statement the minimum wage would further increase to K3.50 over the next two years, representing a 50 per cent increase.

He said, however, exemptions have been made for workers in the agriculture sector and employers who were financially incapable of paying the minimum wage.