Australia’s Wage Price Index (WPI) rose 0.6% during the March 2021 quarter. This was just above expectations of 0.5% and mimicked the rise in December quarter. Wages for the private sector rose 0.6%, while for the public sector the rise was 0.4%. Pay freezes at state and federal levels are still in effect, while private sector pay freezes have begun to lift over the last six months. Overall, the WPI increased 1.5% over the 12 months through March 2021. However, this is significantly below the 2.1% growth over the year through March 2020, due to record low wages growth over the prior June 2020 and September 2020 quarters. Average annual wages growth over the past decade has now slipped to 2.5%, with WPI growth slowing every year bar the year ending March 2020.
The largest growth in the WPI around the country was 0.8% in Tasmania, with Victoria coming in next at 0.6%. The Australian Capital Territory, Queensland and Western Australia all recorded the lowest growth, at only 0.4%.
Individual arrangements and enterprise agreements contributed to over 85% of the growth in the WPI, with award wage rises contributing to the rest. The Accommodation and Food Services division recorded the largest rise during the March quarter, double the economy-wide average at 1.2%. This was due in part to the ongoing growth in demand as restrictions eased further. Additionally, these employees were also entitled to award wage rises which had been postponed as a result of the COVID-19 pandemic. Conversely, the lowest quarterly rise in the wage price index was shared by three divisions each recording growth of only 0.1%: Rental Hiring and Real Estate Services; Electricity, Gas, Water and Waste; and Arts and Recreation.
