Scott Morrison has warned Bill Shorten’s plan to deliver a big pay rise to Australia’s lowest-paid workers will force small businesses to “sack people”.

But significantly, the Prime Minister has not ruled out supporting a modest increase for Australia’s lowest-paid workers as the government remains under pressure over stagnant wages.

The Fair Work Commission (FWC) has previously conceded that Australia’s minimum wage of $18.93 per hour, or $37,398 per annum, leaves many full-time workers in poverty.

The Morrison government’s formal submission to the FWC will be known within 24 hours, as it must be lodged by Friday.

Traditionally, the successive governments have lodged submissions that do not explicitly call for wages to increase, instead preferring to lay out the economic landscape and leave the question to the experts.

The PM has opened fire on Labor’s broader agenda to legislate changes to the rules that govern how the FWC increases the minimum wage.

“Bill Shorten needs to come clean about this. What is he exactly proposing here? Because what is sounds like to me at the moment is he’s going to force small and family businesses all around the country to sack people, in order to possibly give some others a few more dollars,” Mr Morrison said.

“Now I don’t think Australians want to see their co-workers sacked, for them to do better, but that’s Bill Shorten’s plan for Australia; to set one Australian against another.

“He’s engaged in this war of envy on Australians, on the economy, on businesses, on employees.”

Speaking in Melbourne, Mr Morrison said it was not the job of the federal government to dictate wages.

“Bill Shorten is trying to perpetuate a lie on Australians that he personally, through force of some mechanism which he is yet to define, can actually change people’s wages in this country,” Mr Morrison said.

“I’ll tell you where stronger wages come from; they come from a stronger economy where businesses are growing and they can employ more people. They earn more money and they’re able to pass on wage increases. That’s how you grow wages in this country.

“You don’t grow wages by increasing taxes. You don’t grow wages by suffocating your economy and you don’t grow wages, as small businesses have said plainly, by forcing small businesses to sack some workers, to pay others more.”

However, the government remains acutely aware that the “wages recession” is a big issue in the community.

It has also canvassed the option of increasing the tax cuts already on offer to address cost-of-living pressures.

Earlier this week, the ACTU called the minimum wage for Australia’s lowest-paid workers to be lifted by $43 a week.

If adopted, the increases would increase the pay of up to 2.23 million award-minimum-dependent workers in Australia.