(Australian Associated Press)
Australian salaries were flatlining even before the pandemic struck.
Wages expanded by just 0.5 per cent in the March quarter, as they have for the past four quarters, according to figures released by the Australian Bureau of Statistics on Wednesday.
This saw seasonally adjusted annual wage growth slow to 2.1 per cent, from 2.4 per cent a year ago.
Public sector wages grew at a slightly faster rate than private sector ones, at 0.5 per cent compared to 0.4 per cent.
The data captured wage information for the mid-month of the March quarter, ABS said, ahead of the social restrictions and business closures imposed in late March to check the spread of coronavirus.
“Wages are likely to weaken materially over the coming months as unemployment spikes and hours collapse amid the pandemic-driven recession,” NAB economist Kaixin Owyong said in a note.
The Reserve Bank of Australia is forecasting wage price index growth to slow to 1.5 per cent by the end of 2020, while NAB forecasts even slower growth of 1.2 per cent, Ms Owyong said.
“A sharper-than-anticipated slowdown in wages would be an additional headwind to recovery given a sustained rebound in consumer spending is needed to return the economy to a solid footing.”
CommSec chief economist Craig James noted that more timely data has been released by the ABS based on payroll data provided by the Australian Tax Office.
That showed wage payments were down by a hefty 8.2 per cent between March 14 and April 18, Mr James said.
Across industries, annual wage growth in the March quarter ranged from 1.6 per cent for the information media and telecommunication services industry to 3.0 per cent for the health care and social assistance industry.
Victoria recorded the highest through the year growth of 2.5 per cent, while Western Australia recorded the lowest for the seventh consecutive quarter, at 1.8 per cent.