The increase to the national minimum wage would boost the weekly pay packet to $812.60 a week or $21.38 an hour.

The announcement by the Fair Work Commission will flow through to about 2.7 million workers from July 1, but in some cases, such as the tourism and aviation sectors, the pay rise will be delayed until October 1.

Workers on awards that were higher than the minimum wage would receive a slightly lower increase of 4.6 per cent, which was below the 5.1 per cent inflation rate. Commission president Iain Ross said that could be considered further in later reviews.

The State Government applauded the decision, saying it was a big boost for the state’s lowest paid workers.

“This will go a long to helping with the cost of living for Queensland’s lowest paid workers,” Deputy Premier Steven Miles said.

The commission also said the increase would not have a significant effect on the competitiveness or performance of the economy.

The mining industry said the pay rise was a “tenth order issue” for the sector which was more concerned with the skills crisis affecting mines.

The decision would mean that that some businesses covered by the modern awards would be hit by two minimum wage increases within a 12-month period. However, the commission said those businesses have also had the benefit of the delayed operative date arising from last year’s decision.

While the decision will help workers fend off the effects of the current inflation rate of 5.1 per cent, the Reserve Bank Governor Phillip Lowe last night predicted inflation would hit 7 per cent by the end of the year, putting workers behind again.

“The panel observed that this level of increase will protect the real value of the wages of the lowest-paid workers,” Commission president Iain Ross said.

“The panel decided to provide a proportionately higher increase to low-paid employees noting that the present circumstances warranted an approach which affords a greater level of support to the low paid while seeking to constrain inflationary pressures.

“The panel decided to increase modern award minimum wages by 4.6 per cent subject to a minimum increase for adult award classifications of $40 per week. The $40 per week increase is based on a 38-hour week for a full-time employee.

“In effect, modern award minimum wage rates above $869.60 per week will receive a 4.6 per cent adjustment, wage rates below $869.60 per week will be adjusted by $40 per week.”

ACTU secretary Sally McManus said unions had worked hard for the increase, but said it only affected one in four workers and wage growth was needed across the country.

“Clearly, the current system is failing. It is unable to deliver wage increases despite low unemployment, high productivity and high profits,” McManus said.

“Working people are feeling the serious consequences of nearly 10 years of inaction by the previous Government.”

The Chamber of Commerce and Industry Queensland said it was a significant increase to Queensland businesses that were weathering the impacts of natural disasters and COVID-19.

“Combined with the increase to the superannuation guarantee from 10 per cent to 10.5 percent the pressure on business is set to increase,” the chamber said.