Australian wages rose 3.4% in the year to March, marking the first uptick in annual wage growth since June 2024, according to data released today by the Australian Bureau of Statistics (ABS).
The Wage Price Index (WPI) increased 0.9% in the March quarter alone, with the annual figure higher than the 3.2% recorded in December 2024 but still below the 4.0% reported a year ago.
“Annual wage growth ticked up for the first time since the June quarter 2024. The 3.4% increase in wages for the year to the March quarter 2025 was higher than the 3.2% to the December quarter 2024, but lower than the 4.0% at the same time last year,” said Michelle Marquardt, ABS head of prices statistics.
The data revealed a growing gap between public and private sector wage growth. Public sector wages increased by 3.6% annually, up substantially from 2.9% in the December quarter. Meanwhile, private sector wage growth remained steady at 3.3%, unchanged from the previous quarter.
In the March quarter itself, public sector wages rose 1% compared to 0.9% in the private sector.
The ABS noted that private-sector wage growth was influenced by administrative wage adjustments from the Stage 3 Aged Care Work Value Case and the Early Childhood Education and Care Worker Retention Payment, along with regular March quarter wage reviews.
Public-sector wage growth was primarily driven by new state-based enterprise agreements and, to a lesser extent, increases for aged care workers.
For the first time since September 2020, jobs covered by enterprise agreements contributed to more than half of all quarterly growth, mainly due to new state-based agreements in the public sector.
RSM Australia economist Devika Shivadekar said the data presented a mixed picture for Australian businesses. “On one hand, rising wages can support consumer spending and boost demand, but on the other, higher labour costs may squeeze margins, particularly for those sectors already facing cost pressures,” Shivadekar said.
She highlighted sector variations, noting, “Healthcare and social assistance saw the biggest wage rises last quarter, while in contrast, retail, hospitality, and media recorded the smallest increases. Over the year, the strongest wage growth was in utilities which rose 4.4%, while finance and insurance saw the weakest annual growth at 2.5%.”
The economist suggested the data aligned with Reserve Bank of Australia expectations, saying, “Although wage growth is currently still above the long-run average, it has clearly moderated from last year’s peaks.”
The ABS will release the Monthly Employee Earnings Indicator on May 21, providing additional insights into total wages and salaries.
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