Australia’s wage growth nominally outstripped inflation for the first time in three years, the ABS reported on Wednesday.
Year-on-year, the wage price index recorded a 4.2% increase in the December quarter, and a 0.9% increase from the September data release.
The December growth represents the highest annual growth since 2009. It follows regulated pay increases in industries such as aged care, and new enterprise bargaining agreements struck in the health and education sectors.
The treasurer, Jim Chalmers, said the government welcomed the news but was not “getting carried away”.
“This is the first time we’ve had three consecutive quarters of real wages growth since 2018,” he said.
“It means that wages growth under the Albanese Labor government is more than 4%.
“Under our predecessors, it was closer to 2%. These are really welcome, really encouraging numbers [but] we are not getting carried away because we know that people are still under pressure.”
Chalmers said real wages growth was one of the priorities of the Albanese government and the latest ABS figures showed it returned “ahead of schedule”.
“The Treasury was expecting real wages growth in 2024. What these numbers show is we got real wages growth in 2023,” he said.
“That’s a very, very good thing to see wages growth earlier than anticipated. But we know that people are still under pressure … People are still confronting these cost-of-living pressures in these suburbs and right around Australia and we want to help people with that.”
Among the data was a new survey of employers on the use of non-compete clauses, which stops an employee from being able to find work with a competitor in the same industry for a set period of time.
The ABS found 21% of Australian businesses reported using non-compete clauses for at least some of their employees in 2023.
Chalmers said non-compete clauses were “concerning” and the government was looking at the issue.
The assistant minister for employment, Andrew Leigh, has long argued non-compete clauses help to suppress wages, as employers are disincentivised to offer pay rises, knowing an employee would be unable to leave for a similar role in another organisation.
Leigh said non-compete clauses, which can also prevent someone from starting their own business in the industry they worked in, were becoming a growing concern internationally and “may be hampering business innovation and productivity”.
“Employment terms that make it harder for workers to move to a better job may be acting as a drag on wages and economic dynamism,” he said.
The ABS found 70% of businesses that used non-compete clauses applied them to more than three-quarters of their employees and included all workers, not just upper management or executives. Bigger businesses, with more than 1,000 employees, were more likely to include a non-compete clause than small businesses.
The financial services sector, rental, hiring and real estate services were among the industries to commonly use a restraint clause, although an independent 2023 survey found non-compete clauses had been used among hairdressers, yoga instructors and early childcare educators.
“Reinforcing the earlier surveys and anecdotal evidence, today’s results confirm that non-compete clauses are prevalent across the Australian economy, and looking into the use of these clauses is a top priority of the Albanese government’s Competition Taskforce,” Leigh said.
Treasury plans on releasing an issues paper for public consultation in April which will ask for feedback on restraint clauses applied to employees.
