Home ownership is beyond the reach of an estimated 1.5 million Australians because the growth in house prices has outstripped the rise in minimum wage more than twofold, unions say.
The ACTU will lodge a submission to the Fair Work Commission on Friday calling for a rise in the minimum wage, now at A$622.20 ($664.56) per week, or A$32,355.44 a year.
In New Zealand, the minimum wage is $550 per week.
While the minimum wage was equivalent to 14 per cent of the mean house price in 1993, it is now at less than 7.5 per cent.
ACTU secretary Dave Oliver said a 250 per cent increase in average house prices in the past 20 years had made it impossible for those earning minimum wages to buy a home.
"For those on a low wage, home ownership is a now pipedream," he said. "Someone on a minimum wage of $622 per week has enough to cover their basic costs and that's about it. These workers tell us it's impossible to save up a deposit, let alone afford the weekly repayments."
Oliver said the minimum wage had increased by 91.2 per cent from 1993 to last year, and would have needed to rise by 254.7 per cent - A$1154.42 a week or A$60,029.84 a year - to keep up with house prices.
He said the only way low income earners could buy a home was to work multiple jobs.
"Many minimum wage earners have been working all their lives caring for older Australians in aged or community care, they work farms, they clean schools and hospitals or look after young children in childcare.'' he said.
Ian Pandilovki, 58, of Granville, has seen his salary increase from A$28,000 a year to A$45,000 over the past 14 years.
The single father, who works as a cleaner at a Sydney high school, says he "can't even think about" buying a house - "it's not within reach".
He pays about A$330 a week in rent.
Welfare Rights Centre director Maree O'Halloran said her organisation came across many women in their 50s who had been carers and were now working in sectors related to cleaning, care, hospitality and retail.
"These women are struggling to survive because both the minimum wage and the Newstart Allowance are too low," she said.
In its submission to the annual wage review, the Australian Industry Group said a careful approach was needed in increases to minimum wages "given the adverse economic impacts which would result from an excessive increase".
A spokesman for Employment Minister Eric Abetz said the government would make a submission to the Fair Work Commission shortly. "We'll have more to say about this then," he said.
- Sydney Morning Herald