Australia’s wage price index growth was 2.35% in the latest reporting period, well below the inflation rate of 5.1%:
However, analysis by former federal Treasury economist Peter Downes suggests that real growth in wages is much higher than official figures indicate. Downes says the wage price index does not take into account the annual rise in the superannuation guarantee or employee bonuses. Moreover the CPI is overstated due to the surge in costs of building a new home, which doesn’t effect most consumers.
Accordingly, Downes estimates that when these factors are included, the real wages index rose 3.3% in the year to 31 March, compared with consumer price inflation of 3.2%:
Advertisement
