The employment minister has rejected claims a rise in minimum wages would put further pressure on inflation and interest rates.
Employment Minister Tony Burke has rejected claims wage growth would fuel a further rise in inflation.
As the Fair Work Commission considers increasing the minimum wage, new data for the March quarter showed a 3.7 per cent annual rise in the wage price index.
While the wage rise was in line with market expectations, it's still well below the rate of inflation of seven per cent.
The commission's president Adam Hatcher has questioned whether a minimum wage increase keeping up with inflation would prompt another rise in interest rates but Mr Burke said that was unlikely.
"There is no way in the world that inflation is being driven by high wage growth because we simply haven't had that," he told ABC Radio on Thursday.
"We're getting closer to people being able to get what should have been sustainable wage increases for years.
"We don't have some sort of wage price spiral ... this is a good outcome for wages at 3.7 but at the same time, we're talking about an inflation rate at seven per cent."
Mr Burke said the government did not put a figure in its submission to the commission on the minimum wage, but indicated wages should not go backwards.
"This is not extraordinary amounts of money that we're talking for those people (on minimum wage) and certainly, it would be a real stretch to say that number of people on those sorts of modest wages are somehow the cause of inflation," he said.
"What the Fair Work Commission did last time was to provide the full increase for people on the minimum wage, and then a lower percentage as you worked your way through the award system."
The comments come ahead of new figures to be released on Thursday by the Australian Bureau of Statistics that are expected to show growing tightness in the labour market.
The unemployment rate has been lodged at almost 50-year lows, coming in at 3.5 per cent in March.
The 53,000 lift in employment across the month also beat economists' expectations and suggested the tight labour market was readily absorbing extra workers from higher migration.
Westpac economists said the swelling population would likely fuel another month of above-trend employment growth in April, with plenty of roles still needing to be filled.
The bank's economists have pencilled in a 40,000 lift in employment and the unemployment rate staying flat at 3.5 per cent.
Consensus forecasts are slightly softer on employment, with another 25,000 jobs expected to be added to the economy and the jobless rate remaining steady.
