Australia’s wage growth is no longer accelerating, with fresh data pointing to a steady but unspectacular pace that offers only limited support for household borrowing capacity.
The Australian Bureau of Statistics reported that the Wage Price Index (WPI) rose 0.8% in the March quarter and 3.3% over the year.
“Quarterly wage growth has remained steady at 0.8% since September quarter 2025. Annual growth in wages was 3.3%, largely unchanged from 3.4% in December quarter 2025,” ABS head of prices statistics Sue‑Ellen Luke (pictured left) said in a media release.
Westpac economist Ryan Wells (pictured right) described the result as a “thin” 0.8%, noting that seasonally adjusted growth was 0.75% to two decimal places. In a Westpac commentary, Wells said the WPI outcome was “in line with Westpac’s forecast and the market consensus” and marks the softest annual pace since late 2024 once earlier public‑sector strength is accounted for.
One of the clearest signs of moderation is in the share of jobs receiving large annual increases.
Westpac highlighted ABS data showing “only 22% of jobs recorded an annualised wage gain of more than 4% in Q1 2026, which is the lowest proportion since Q2 2022.” That shift suggests fewer households are seeing outsized pay rises that could otherwise fuel stronger spending and price growth.
In the private sector, wages excluding bonuses have now risen 0.8% for four consecutive quarters. Because gains were stronger a year ago, annual growth has slipped to around 3.2%, representing the weakest point in the current upswing. Public‑sector wages increased by a smaller 0.5% in the quarter, pulling their annual pace back from 4% to roughly 3.3% and largely closing the recent gap with the private sector.
ABS noted that healthcare and social assistance made the largest contribution to wage growth in the quarter, aided by early childhood education initiatives and hospital agreements. The concentration of stronger outcomes in these areas, alongside more moderate moves elsewhere, points to wage pressures that are increasingly sector‑specific rather than broad‑based.
Overall, the latest figures point to a wages backdrop that is steady rather than accelerating, with only gradual income growth across most sectors.
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