No pot of gold in Aussie pay packets
Australian wage rises have been so low over the past year that most workers have gone backwards.
The latest wage price index from Australia's Bureau of Statistics shows an average increase of 2.6 per cent in the year to June, well below the inflation rate of 3 per cent.
The increase is the lowest since records began in 1997.
Until recently the mining industry was Australia's wage pacesetter, offering increases of 6 per cent or more per year. This year it offered just 2.5 per cent, even less than manufacturing, which offered 2.7 per cent.
The most generous industries were education (3.2 per cent), arts and recreation (3 per cent) electricity, gas and water (3 per cent), health care and social assistance (3 per cent), construction (2.9 per cent) and public administration safety (2.8 per cent).
The least generous were tourism (2.1 per cent) and wholesale trade (2 per cent).
Bank of Melbourne economist Jo Horton said the low wage growth was the result of low employment growth. Over the past year the number of Australians in jobs has climbed just 0.8 per cent while the adult population has climbed 1.8 per cent.
''The rise in the unemployment rate suggests wage growth is likely to remain subdued for some time,'' he said. ''An increase in wage growth would likely require a sustained fall in the unemployment rate.''
Selling the budget in Brisbane ahead of the release of the wage figures Treasurer Joe Hockey attempted to turn low wage growth to his advantage, saying a budget proposal to lift pensions in line with the consumer price index rather than wages would actually advantage pensioners in the present environment.
''In net terms out of the budget it is strongly arguable that pensioners are going to be better off, even with potential changes from male total average weekly earnings increases to consumer price index inflation, because inflation increases are bigger than increases in wages,'' he said.
The Westpac Melbourne Institute consumer sentiment index climbed 3.8 per cent in August, its third consecutive increase since the budget. It is now only 1.2 per cent lower than before the budget, but still in negative territory where pessimists outnumber optimists.
Westpac chief economist Bill Evans said households had probably been ''buoyed by resistance in the Senate to many of the unpopular budget measures''.
''It would seem households are now assuming that some of these measures will eventually be moderated or abandoned,'' he said. ''With the Senate set to reconvene on August 26, households will be anticipating a restructuring of the budget that was released on May 13.''
Sydney Morning Herald