ACT ranks last on wage growth, failing to keep up with inflation

The wage price index, released on Wednesday, revealed that ACT workers who secured a pay rise saw their pay packets grow by just 0.5 per cent last quarter, the lowest result in the country.

The territory also ranked second last in annual wage movement last year, reporting a change of 3.9 per cent through the year.

The result means that wage increases in the ACT have failed to keep up with cost-of-living, with inflation climbing to 0.6 per cent in the December quarter, and 4.1 per cent in the year to December.

By comparison, the average base pay rose 0.9 per cent in Australia in the same period, seasonally adjusted.

Treasurer Jim Chalmers said that while it was "really encouraging" to see wage growth of 4.2 per cent across Australia over the year to December, people were still struggling with cost-of-living pressures.

"If you look at these numbers today, wages growth at 4.2 per cent, the fastest annual growth since 2009. This is the first time we've had three consecutive quarters of real wage growth since 2018," he told reporters on Wednesday,

"It means that wage growth under the Albanese Labor government is more than four per cent. Under our predecessors, it was closer to two per cent.

"These are really welcome, really encouraging numbers. We are not getting carried away, because we know that people are still under pressure and that's why we want to get every taxpayer a tax cut from 1 July."

Meanwhile, the public sector has reported the highest annual wage growth in more than a decade, eclipsing the private sector for the first time since 2020.

The wage price index rose by 1.3 per cent across the public sector in the December quarter, seasonally adjusted.

Public sector wages also grew 4.3 per cent across the 12 months to December 2023, the biggest rise for the sector since the 2020 March quarter.

The ABS said that this rise followed changes to some state wage policies and new enterprise agreements that came into effect.

Meanwhile, in the private sector, wages grew 0.9 per cent in the December quarter, and 4.2 per cent over the year - in line with the overall pay lift across the country.

Despite being outperformed by the public sector, the private sector was still the main contributor to wage growth in the country, given its size.

The ABS wage price index for the December quarter also recorded a significant jump in average hourly wages in the public sector - 4.4 per cent compared to 3.7 per cent the previous year.

While fewer jobs overall recorded wage movement in the December quarter compared to the previous year, this wasn't the case in the public sector.

The most recent figures revealed a significantly higher proportion of jobs reporting wage movement in the public sector compared to the December 2022 quarter, 38 per cent compared to 29 per cent.