A new financial year has begun. But is it business as usual? As FY26 kicks off, Australia’s workforce is entering a period of visible transformation. Beyond the annual headlines around minimum wage increases and policy shifts, a deeper set of forces is reshaping how we work, who we hire, and where the economy is heading. The first week of July 2025 brings not just procedural changes but signals that we may be entering a new employment era — one marked by the rise of automation, renewed focus on national productivity, and serious questions about how the workforce will adapt to evolving demands.
Minimum wage increases land… But will they go far enough?
From July 1, 2025, the national minimum wage officially rose by 3.5%. That brings the new baseline for full-time employees to $948 per week, or $24.95 per hour. This change directly impacts about 2.6 million workers, or 20% of Australia’s workforce. But in an economy where living costs continue to outpace wage growth, critics argue it’s still not enough. The Australian Council of Trade Unions is now pushing for a national “living wage” model — one that ties future increases to actual cost-of-living data rather than inflation alone. This conversation is more than symbolic. For sectors reliant on award-based pay — retail, hospitality, community services — even a modest wage adjustment can alter recruitment outcomes and workforce planning for the year ahead.
Skilled migration settings shift to reflect market pressures
Also effective from July 1 is a change to how salary thresholds for skilled visas are calculated. The government has introduced annual indexation, ensuring that skilled migration pay floors rise in step with national wage growth. This change has implications for employers who rely on overseas talent to fill hard-to-staff roles in health, engineering, and construction. It also aligns with a broader narrative emerging in FY26: Australia is no longer just chasing more workers — it is chasing the right kind of workforce, equipped with the right level of compensation and skills recognition.
Economic signals show softness in spending and hiring
n the lead-up to FY26, Australia’s economy delivered a warning shot. In Q1 of 2025, GDP growth slowed to just 0.2% quarter-on-quarter, and only 1.3% year-on-year. This soft performance — largely driven by weak consumer spending — has prompted widespread speculation that the Reserve Bank of Australia will deliver a rate cut in July. For employers, the message is clear: businesses will need to be strategic in recruitment and retention. Job seekers are likely to become more selective, while workforce planning will need to account for lower discretionary spending and cautious consumer demand.
Strikes, AI and structural shifts put industry under pressure
In early July, over 400 workers at Adelaide’s BAE Systems naval shipyard walked off the job, seeking a 30% wage increase. Their industrial action threatens delays to key AUKUS submarine production — a critical element of Australia’s long-term defense and economic strategy. Meanwhile, in the private sector, major employers such as Hungry Jack’s and McDonald’s are trialing AI-driven drive-through technology. While marketed as innovations to improve efficiency, these tools could reshape the future of entry-level jobs, raising questions about workforce displacement and ethical tech deployment. Together, these stories suggest that FY26 may become a defining period for how Australia balances technological advancement, job security, and national priorities.
A workforce in motion, but are we ready?
What stands out most about the opening week of FY26 is not one single change, but the number of overlapping shifts happening simultaneously. Wages are up, but cost pressures remain. Productivity is a national concern, but the solutions are fragmented. Employers want skills, but workers want flexibility and meaning. As the economy recalibrates, the workforce must evolve with it. That means not just reacting to change but preparing for it — by embracing new recruitment models, reassessing pay structures, and investing in the long-term capabilities of the people who keep Australia working. The question for the months ahead isn’t whether things will change. It’s whether we’re bold enough to meet that change with action.
