Treasurer Scott Morrison has declared record low wage growth the "biggest challenge" facing the Australian economy.

Key points: Scott Morrison says he is committed to ensuring workers earn more each week

Scott Morrison says he is committed to ensuring workers earn more each week Treasurer says workers won't earn more if business aren't earning a profit

Treasurer says workers won't earn more if business aren't earning a profit Opposition says penalty rates decision nothing more than a pay cut for Australian workers

His comments come after the Federal Government cautiously endorsed the Fair Work Commission's decision to reduce Sunday penalty rates for thousands of hospitality and retail workers, arguing it was an independent body with the power to make such decisions.

That triggered a fierce political fight, with the Federal Opposition accusing the Government of failing to protect the income of thousands of low-paid weekend workers.

But Mr Morrison today told Bloomberg he was committed to ensuring workers took home more money each week.

"The biggest challenge we have is to ensure what Australians are earning every week is increasing," he said.

"We've had flat wage prices; our wage price index has been flat for some period of time now.

"Increasing what Australians earn — whether it's wage earners or small businesses — is what I think is the big challenge now."

The Fair Work Commission cited economic benefits as a reason for its cut in penalty rates.

Mr Morrison said workers would never be able to earn more if their workplaces were closed or their bosses were struggling to earn a profit.

"You're not going to earn more if the business isn't open, you're not going to earn more if the business isn't earning a profit," he said.

"So the profitability of businesses small, medium and large is critical to Australians earning more, and that's why we're focussed on that, on investment to drive that profit growth."

The commission's decision to reduce penalty rates came 24 hours after the Australian Bureau of Statistics revealed the lowest wage growth since records began in the late 1990s.

Prime Minister Malcolm Turnbull has previously argued that reducing Sunday rates will enable businesses to employ more Australians, boosting employment across the country.

Mr Morrison has previously argued for cuts to the corporate tax rate to increase employment and counter subdued wage growth.

Labor target penalty rate decision

Labor has seized on the penalty rate decision, describing it as nothing more than a pay cut that will reduce the standard of living for "millions" of Australians.

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"What these cuts mean is that for people who work in retail and hospitality and pharmacy and fast food, they're getting a wage cut, full stop," Opposition Leader Bill Shorten said.

"There's no increase in wages in any other part of the pay packet."

Labor's shadow employment minister Brendan O'Connor has already announced plans to introduce legislation to prevent the commission's decision from taking effect.

He told reporters on Monday that Australians were struggling to make ends meet and some were going backwards in terms of wage growth.

"It is in no-one's interests to have people struggle to make ends meet or pay the rent or mortgage," he said.

"Many people are struggling to make ends meet. We have the lowest wage growth in a generation."

Wage growth has been constrained in the mining industry over the past three years due to a downturn in the sector, transitioning from high wages and pay rises during the boom.

Last month, Reserve Bank governor Philip Lowe warned that record high household debt and record low wage rises were limiting consumer spending and hurting the national economy.

Many economists predicted a small increase in wage growth last month and have since said the poor result would do little to increase the consumer spending many businesses rely on.