Audit recommends 10 year freeze on minimum wage

GROWTH in the minimum wage would be effectively frozen below inflation for the next decade, if the Abbott government acts on one of the Commission of Audit's recommendations.

While the audit was given a focus on reducing government spending over the next 10 years, one of its recommendations focuses on the minimum wage, not a government expense.

The wage, which is currently determined through an annual review by the Fair Work Commission, would be taken out of the hands of the independent body under the proposal.

It recommends that, due to the "relationship between the rate of income support and the minimum wage", it was necessary for the audit to consider the future of nation's lowest paid workers.

The audit proposed that growth in the minimum wage be limited to "improve job opportunities and the effectiveness of the government's employment policy programs".

It recommends that for the next decade, the minimum wage rise in line with inflation, "less 1 percentage point" - effectively setting the minimum wage at below the cost of living for 10 years.

It has proposed establishing a new "minimum wage benchmark", set at 44% of average weekly earnings, and then handing the power to set the wage over the states and territories.

"The commission recommends that a different minimum wage apply in each jurisdiction, with a transition period over the next 10 years," the report reads.

While Treasurer Joe Hockey said he would not rule any recommendations in or out, if the government wants to pursue such proposals, the response may be outlined in the coming budget.