Treasurer Jim Chalmers said in an interview with ABC Radio on Tuesday (17 January) that the 3 per cent growth in wages exceeds the average over the past decade of 2.3 per cent and according to the government’s estimates, wages will continue to improve over the next 12 months.
“We expect wages to continue to grow, but we’ve got this inflation challenge in our economy and so people are still doing it tough,” Mr Chalmers said.
“But one of the most important things that we can do — when people are under cost‑of‑living pressure — is to do whatever we can to get wages moving again.”
Mr Chalmers said the growth in wages was a consequence of the minimum wage implementation last year.
He said Treasury also expects inflation to moderate through 2023 but conceded it will be higher than the government would like for longer than it would like.
“We’ve got an inflation problem in our economy not because wages growth has been too strong but because we’ve got a war in Ukraine pushing up energy prices and we’ve had a pandemic which has been messing with supply chains and some other factors which are pushing up prices in our economy,” he said.
In current forecasts provided by the Treasury, the expectation is that there will be real wages growth next year, but it relies on unpredictable forecasts when it comes to inflation.
“The wages growth that we’re seeing in the economy is something that we hope we can sustain, and obviously inflation will moderate over time,” Mr Chalmers said.
“When inflation comes down and we get this strong and sustainable wages growth in our economy, then we’ll get real wages growth for the first time in a while.”
