16 Aug ‘That is progress’: optimism as wages climb again
Real wages have not gone backwards for the first time in three years.
The wage price index, released by the Australian Bureau of Statistics on Tuesday, rose by 0.8 per cent in the June quarter.
This compares with the consumer price index – a measure of the cost of living – which grew by 0.8 per cent in the June quarter.
The annual figure came in at 3.6 per cent.
Private sector wages rose 0.8 per cent and public sector wages were up 0.7 per cent.
“For the third consecutive quarter, wages grew 0.8 per cent,” ABS head of prices statistics Michelle Marquardt said.
“Wage rises from regular June-quarter salary reviews were higher than in the same period last year, as recent cost-of-living and labour market pressures were incorporated into organisation-wide decisions on wages.”
Treasurer Jim Chalmers said Australia was seeing the wages growth Labor had committed to before the election.
“One of our key objectives in our economic plan was to get wages moving again, and this is the first time that real wages haven’t gone backwards, in a quarterly sense, for three years and so that is progress,” he told reporters.
“We’ve taken a different approach and that’s why the wages outcomes under this Labor government have been so much better and so much stronger than under our predecessors.”
Shadow treasurer Angus Taylor said real wages had gone backwards in every quarter on an annual basis since Labor came to government in 2022.
“The government needs to bring inflation back to band (two-to-three per cent) by reining in spending, support economic growth through deregulation and driving productivity reform to increase real wages,” he said.
Compared with a year ago, fewer jobs had wage hikes in the June quarter but on average, the increases received were higher.
The share of jobs receiving increases above three per cent was the highest in a June quarter since 2012.
Annual wages growth of 3.1 per cent for public servants was the highest for the sector since the March quarter of 2013, as enterprise bargaining agreements kicked in.
The main drivers of private sector wage growth over the quarter were construction (up 1.3 per cent) and professional, scientific and technical services (up 0.7 per cent).
The arts and recreation industry recorded the highest annual growth, coming in at 4.5 per cent.
Oxford Economics Australia’s Sean Langcake said it was a surprisingly slow pace given the very low jobless rate.
“Having paused in August, we do not think these data alone will spur the Reserve Bank into another rate hike in September,” he said.
EY senior economist Paula Gadsby said the latest Reserve Bank minutes, also released on Tuesday, indicated the August decision had been based on inflation easing more than expected in the June quarter, consumption slowing significantly, and an improvement in labour availability.
“But there is still concern about low productivity growth and higher unit labour costs, which could fuel inflation once again,” she said.
“For now, the Reserve Bank will continue to remain alert, but not alarmed ahead of their next meeting in September.”
KPMG chief economist Dr Brendan Rynne noted wage growth was broad-based at a state level.
“The lowest quarter-on-quarter wage growth was observed in Tasmania at 0.4 per cent, while other states and territories recorded at least 0.5 per cent quarterly growth,” he said.
(Australian Associated Press)