Australian unions are pushing for a “survival increase” in the minimum wage as inflation and the cost of living crush the lowest-paid workers.

The Australian Council of Trade Unions wants a 7 per cent boost to incomes which it says is “essential”.

This would equate to raising the national minimum wage by $1.50 an hour to keep pace with inflation — taking their annual pay to $45,337.28.

The ACTU has made a formal submission to the Fair Work Commission’s annual minimum wage review ahead of its decision in June.

ACTU Secretary Sally McManus said low-paid workers had suffered the most under rising inflation.

“A 7 per cent pay increase is essential for minimum and award wage workers, who have suffered real wage cuts over the past two years,” Ms McManus said on Thursday.

“This increase is vital to help working people keep their heads above water.”

Ms McManus said it was “simply about survival”.

“There are real people behind the statistics of Australia’s cost-of-living crisis — the workers we rely on to deliver vital services in early learning, aged care, disability care, fast food, cleaners, security, and retail.

“People are skipping meals, avoiding medical care and dreading their next bill.

“Rents have skyrocketed along with the cost of essentials such as groceries, clothing, fuel, and childcare.”

On Wednesday, the Albanese government gave its strongest indication yet it would back another big lift in wages.

Employment Minister Tony Burke said “our values haven’t changed” as the federal government prepared its annual submission to the Fair Work Commission due on Friday.

“The thing that we must work our way through is there are some members of the workforce who have the least room to move with what’s been happening with inflation, and certainly the full award system goes all the way up to some people who are on significantly higher wages,” Mr Burke told ABC radio.

The wages push comes as new figures on Wednesday showed inflation eased back for the second month in a row.

Consumer prices lifted 6.8 per cent in the 12 months to February, sinking from 7.4 per cent annual growth in January.

The news bolstered the case for an interest rate pause when the Reserve Bank board meets next week.

Treasurer Jim Chalmers welcomed “a number with a six in front of it” but said inflation remained unacceptably high and well above the RBA’s target range of 2-3 per cent.

“It’s more evidence that inflation peaked at the end of last year and it’s moderating this year, but it will be higher than we’d like for longer than we’d like,” he told parliament on Wednesday.

The ACTU argues that because businesses posted strong and in some cases record profits in the most recent reporting period, the proposed wage increase is more than affordable.

Minimum and award wage increases had no discernible impact on inflation last year, it added, noting that the biggest risk to the economy was a collapse in consumer spending power.

“There is now general acceptance of what the ACTU has been saying for a year,” Ms McManus said.

“There is no wage-price spiral in Australia.

“Instead, companies have been posting huge profits, driving inflation through excessive price rises.”

In its 2022 decision, the Fair Work Commission raised the minimum wage by 5.2 per cent, equating to $21.38 an hour.

This was after the ACTU argued for a 5.5 per cent increase and the Australian Chamber of Commerce and Industry, Australian Industry Group and other employer bodies proposed an increase between 2.5 per cent and three per cent.

Submissions to the commission national minimum wage review close on Friday.