Public sector wages rise nearly 1 per cent in June quarter

Wages have grown nearly 1 per cent across Australian sectors in the past three months, driven particularly by gains in the public sector and construction.

Australian Bureau of Statistics data shows for the June quarter shows public administration and safety wages grew 1 per cent.

One analyst said the RBA would be “somewhat relieved” to see wage pressures subsiding.

However, without an improvement in productivity growth, the current pace of wage growth was still a “little too strong” for inflation to return to target quickly, Oxford Economics Australia head of macroeconomic forecasting, Sean Langcake, said.

Commonwealth pay increases led to an outsized increase in public sector wages for the quarter, the macroeconimist said.

“There has been a steady slowing in the pace of private sector wage growth over the past year, consistent with the slackening in labour market conditions,” Mr Langcake said.

Wage pressures are strongest in ‘non-market’ industries of health, education and the public sector, where hiring had been strongest during the past year, he said.

“Moreover, the construction industry continues to generate strong wage pressures, consistent with capacity constraints in the industry.”

Construction wages ticked up 0.9 per cent and professional, scientific and technical services workers gained 0.7 per cent.

As a whole, the bureau’s seasonally adjusted wage price index rose 0.8 per cent this quarter and 4.1 per cent during the past year.

The gains represent a plateau in yearly terms for this quarter

Annual wages growth peaked at a 14-year high of 4.2 per cent in December 2023; the previous two quarters have seen wages rise 4.1 per cent.

The private sector wages gain of 0.7 per cent is the equal lowest rise for the sector since the December quarter of 2021.

The public sector’s 0.9 per cent rise, up from 0.6 per cent last quarter, is the highest rise recorded for the sector in a June quarter since 2012.

More to come