Tens of thousands of Victorian construction workers are set to win wage increases of up to 7 per cent after Construction, Forestry, Mining and Energy Union (CFMEU) delegates backed a deal that would see a minimum wage increase of 5 per cent per annum.

 

The deal was struck between the CFMEU and the Master Builders Association of Victoria, but had drawn heavy criticism from industry.

 

Victorian Premier Ted Baillieu warned that escalating wages could cause a blow out in costs to infrastructure projects.

 

''If escalating costs continue to grow at the current rate, I believe we are in danger of pricing ourselves out of infrastructure capacity in this state,'' Mr Baillieu said.

 

CFMEU secretary Bill Oliver told Fairfax Media that the wage increases reflected growing living costs throughout the country while urging the union’s members endorse the deal.

 

The deal comes as the construction industry records its twelfth month of consecutive contraction according to recent data released by the Housing Industry Association.