Wage growth steady at 3.4% as private-sector pace slows

Australia’s Wage Price Index (WPI) rose 0.8% in the September quarter 2025, matching expectations and keeping annual wage growth steady at 3.4%, according to the Australian Bureau of Statistics (ABS).

“Annual wage growth to the September quarter 2025 was 3.4%," ABS head of prices statistics Michelle Marquardt (pictured left) said in a media release. "Annual wage growth remained steady compared to the June quarter 2025 but was slightly lower than this time last year.”

Quarterly growth held firm at 0.8% – the same pace recorded in June 2025 and September 2024.

The wage data follows signs of a softening labour market, with unemployment rising to 4.5% in September – the highest in four years. Economists say easing labour conditions could support the case for rate cuts in 2026 if inflation continues to moderate.

Private-sector growth eases as public wages lead

Seasonally adjusted private-sector wages rose 0.7%, while the public sector lifted 0.9%, marking the third consecutive quarter where public-sector growth outpaced private.

Annual public-sector wage growth reached 3.8%, edging up from 3.7% a year earlier.

Marquardt said, “State government pay rises contributed 82%of public sector wage growth this quarter,”reflecting both workforce size and the scale of adjustments.

Private-sector wages grew 3.2% over the year – down from 3.5% in September 2024 – as fewer jobs saw wage changes (47% vs 49% last year) and the average increase moderated to 3.6% from 3.9%.

The Fair Work Commission’s 3.5% minimum-wage rise from July 1 also contributed to the September figures, lower than the 3.75% increase awarded in 2024.

Westpac: Wages tracking “as expected”

Westpac senior economist Justin Smirk (pictured right) said wage trends were broadly in line with expectations, noting the stronger public-sector result offset softer private-sector outcomes.

“As the 0.8% increase matches the increase seen in September 2024, the annual rate was flat at 3.4%," Smirksaid in a Westpac commentary. "The slightly stronger-than-expected print was due to stronger public-sector wage gains offsetting softer wage outcomes in the private sector.”

Private-sector wage growth has now slowed to its weakest pace since mid-2022.

Public-sector wages rose 3.1% this quarter (in original terms) – slightly higher than the same period last year but softer than earlier quarters, signalling a gradual moderation.

Westpac expects wage growth to hold around current levels through year-end, forecasting 3.3% annual growth for December 2025.

Wage trends by bargaining stream

In original terms, wages rose 1.4% in the quarter, with the largest contribution coming from individual arrangements (0.55ppt), followed by enterprise agreements (0.50ppt) and awards/minimum wage (0.36ppt).

Westpac estimates annual wage growth at:

• 3.7% for enterprise bargaining
• 3.3% for awards/minimum wage
• 3.1% for individual arrangements – the slowest pace since mid-2022

Industry trends: Health and public administration lead

Health care and social assistance contributed the largest share to quarterly wage growth (0.22ppt), followed by professional, scientific and technical services (0.13ppt).

Westpac’s seasonally adjusted estimates show:

• Public administration & safety had the strongest wage inflation (1.3% qtr / 4.4% yr)
• Information media & telecommunications recorded the softest (0.5% qtr / 3.2% yr)

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