If there is a factor behind the cost of goods and services going up, it does not appear to be wages and salaries, at least not on average. For the past five years, the rate of growth of Australian wages and salaries on an hourly basis has been falling.
According to the latest December quarter figures published by the Australian Bureau of Statistics (ABS), hourly wages grew by 0.5% in the December quarter, which is the same as the September figure and in line with market expectations. Year-on-year growth was steady at 1.9% and still at a record low. The growth rate is now barely more than consumer inflation and unless employment rises and adds upwards pressure on wages, Australian pay rates may start to lag consumer price rises.
While the overall figures are being mostly influenced by private sector pay, even the public sector is struggling and hourly-wage inflation is the lowest since records began in 1998. Year-on-year figures for the public sector rose by 2.3%, the same as September’s number.