Scott Morrison is confident Australians' wages will grow faster as the economy continues its strong recovery and the unemployment rate falls.
Reserve Bank of Australia governor Philip Lowe wants to see a marked improvement in wages growth, the missing link in the economy's recovery from the pandemic-induced recession.
"Our businesses will be more prosperous as the economy grows, and I expect that businesses will be able to share those proceeds with their workers," the prime minister told reporters while touring Tasmania on Monday.
"They know they need skilled staff to be competitive and it's in their interest to make sure that they're supporting their employees and their workforce in the way they need to."
Key wages data for the December quarter are due this week.
While economists expect annual growth to tick-up to 2.3 per cent from 2.2 per cent as of the previous three months, it is still well short of the three per cent-plus the RBA is looking for.
Both the RBA and Treasury are expecting the jobless rate to fall below four per cent this year, a level not seen in 50 years.
The unemployment rate held steady at a 13-year low of 4.2 per cent in January, despite the disruptions caused by the Omicron variant.
Retail sales also held up better than feared during January and may now get a further fillip with the reopening of international borders.
Australian Retailers Association CEO Paul Zahra concedes January was an up-and-down month for retailers. The year began with a surge in Omicron cases, which impacted local supply chains and forced tens of thousands of workers into isolation each day.
"However, towards the end of the month, we saw daily caseloads start to come down, close contact isolation requirements were eased for essential workers and consumer spending started to lift," Mr Zahra said.
"Overall, we've had a soft landing from Omicron and the impacts on sales have not been as severe as we originally feared," Mr Zahra said.
According to the Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment, retail sales rose 2.4 per cent in January to be 4.9 per cent higher than a year earlier.
Compared with pre-pandemic levels in January 2020, sales were up by a solid 14.4 per cent.
However, Mr Zahra said sales remain uneven and depend on the type of business and where it is located, while cashflow concerns remain a challenge for many retailers coupled with rising supply chain costs.
"CBD retailers are a focus on our path to recovery with foot traffic through our capital cities still quite low with the absence of international tourists and exacerbated by people continuing to work from home," he said.
"We are looking forward to the international border reopening, which is the first step towards the revitalisation of our city centres."
International tourist travel restarted on Monday with Australia's borders opening after two years of closure due to the pandemic.
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said this is the moment tourism businesses have been waiting for.
"Fortress Australia at last comes to an end," he said.
Prior to the pandemic, the economic benefit from inbound tourism contributed up to $45 billion in income each year.
"While there will be a considerable lag before arrivals return to their pre-pandemic levels, the long road to recovery for crippled tourism businesses starts now," Mr McKellar said.
