Annual wages rise 4.1%, but private sector shows lower growth

The Wage Price Index (WPI) has been updated with the June quarter data by the Australian Bureau of Statistics, showing a steady growth overall, with some blemishes in other sectors.

According to the Australian Bureau of Statistics (ABS), the WPI rose 0.8 per cent in the June quarter of 2024, bringing it to a total increase of 4.1 per cent for the year.

In terms of the individual sectors, the public sector wages rose 0.9 per cent, up from 0.6 per cent in the March quarter 2024. This increase in public sector wages was lower than in the December quarter 2023 (1.3 per cent), but at the same time, it was higher for the sector than for any June quarter since 2012.

The private sector, however, somewhat dwindled in their increase, staggering at a wages growth of 0.7 per cent, down from 0.9 per cent in the March 2024 quarter.

Michelle Marquardt, ABS head of prices statistics, said: “The June quarter 2024 private sector rise was the lowest rise for a June quarter since 2021 and the equal lowest rise for any quarter since December quarter 2021.”

This low was, of course, not shared with the public sector, which could have been a by-product of the synchronised timing of the Commonwealth public sector agreement increases, which sees to a base salary increase for public sector workers from 2024-2026.

“The stronger June quarterly rise for the public sector was largely due to the newly synchronised timing pattern of Commonwealth public sector agreement increases,” said Marquardt.

“All Australian Public Service employees received pay increases effective 14 March 2024. This led to a larger increase in the contribution Commonwealth jobs made to public sector wage growth. Pay rises for these jobs had previously been paid at different times across quarters depending on the timing of individual agency agreements.”

The Commonwealth public sector agreement has base salary increases that are as follows:

• 4.0 per cent from the first full pay period on or after 1 March 2024 (the 14 March 2024).
• 3.8 per cent from the first full pay period on or after 1 March 2025 (the 13 March 2025).
• 3.4 per cent from the first full pay period on or after 1 March 2026 (the 12 March 2026).

Although the public sector is being granted these salary increases, it was recently announced by Premier Chris Minns that all public servants in the state of NSW will be returning to the office.

As has been widely reported, a directive was issued from Minns’ office to various departments, outlining the “starting position” for all public service employees is to “work principally in an approved workplace”.

“This is about building up a culture in the public service,” said Premier Minns.

With their pay somewhat increasing but their flexibility being diminished, it will be interesting to see how much they value one over the other.

In terms of the private sector, flexibility is still a foundational pillar in both retention and recruitment; therefore, although their wage increases may be growing at a slower rate, their flexibility isn’t being sacrificed.