Business groups warn 5.1pc increase to minimum wage to match inflation is unsustainable and would damage economy

Business lobby groups warn Anthony Albanese's support for a five percent increase in the minimum wage is excessive, unsustainable and will force the Reserve Bank to raise interest rates more aggressively.

The Australian Industry Group is backing a 2.5 percent increase (that's an extra $19.30 a week to minimm wage workers) and they say anything higher would only stoke inflation and force the Reserve Bank will be forced to react with steeper interest rate rises.

The Australian Chamber of Commerce and Industry thinks a minimum wage increase of up to 3 percent is "reasonable" given inflationary pressures "not seen for some time" - still the biggest increase ACCI has ever supported

ACCI chief executive Andrew McKellar warns employers also have to deal with higher compulsory superanuation costs for workers and tells me anything beyond 3 percent would be irresponsible and unsustainable