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6345.0 - Labour Price Index, Australia, Sep 2010 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 17/11/2010   
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COMMENTARY


WAGE PRICE INDEXES

National minimum wage decisions

On 1 July 2009 a new national workplace relations system underpinned by the Fair Work Act 2009 began. The body implementing this new system is Fair Work Australia. In June 2010 Fair Work Australia announced its first annual minimum wage decision: an increase of $26 a week, effective from 1 July 2010. The increase in minimum wage rates impacted the wage price index (WPI) in the September quarter 2010. It is possible that some residual increases will flow through to the December quarter as some employers may not have had the opportunity to process pay increases prior to the September quarter reference date of 20 August 2010.

The timing of the increase in minimum wage rates in 2010 was different to that resulting from decisions made by the Australian Fair Pay Commission. To account for the change in timing, the seasonally adjusted and trend series have been reanalysed. The new series have been calculated to remove the influence of the different timing of minimum wage decisions in any year on the WPI. A trend break has been applied between the June quarter and the September quarter 2009 to remove the effect on the underlying trend series of the Australian Fair Pay Commission's decision not to increase minimum wage rates in 2009.


Australia/Sector (trend)

In the September quarter 2010, the Private sector wage price index rose by 1.0% compared to 0.9% for the Public sector and the All sectors index recorded a quarterly movement of 1.0%. This was the first time since the September quarter 2008 that the Private sector quarterly movement has been greater than that for the Public sector.

The Public sector movement for the year through to September quarter 2010 (4.0%) remained above that of the Private sector (3.4%). However, the gap between the two series reduced this quarter.


State/Territory (original)

The highest quarterly movement (1.8%) was recorded by the Australian Capital Territory and the lowest quarterly movement (1.0%) by Tasmania. Through the year increases ranged from 3.2% for Tasmania up to 3.9% for Queensland and the Northern Territory.

In the Private sector, all states and territories recorded quarterly growth in excess of 1.0%, and only Tasmania recorded a lower quarterly increase in the September quarter 2010 than in the September quarter 2009. The lowest quarterly increase in the Private sector in the September quarter 2010 was recorded by Western Australia (1.2%) and the highest was recorded by Victoria (1.7%).

Through the year movements in the Private sector in all states and territories, except Tasmania, were higher in the September quarter 2010 than in the June quarter 2010. Western Australia and the Northern Territory both recorded the highest Private sector quarterly movement of all states and territories (3.7%) in the September quarter 2010 and Tasmania and the Australian Capital Territory recorded the lowest (3.3%).

New South Wales, Queensland and the Australian Capital Territory were the only states or territories in which the Public sector quarterly movement for the September quarter 2010 was greater than that for the Private sector. In the Public sector, New South Wales recorded the highest quarterly movement of all states and territories in the September quarter 2010 (2.0%) and Queensland recorded the highest through the year movement (5.4%). Tasmania recorded both the lowest quarterly movement (0.3%) and, together with Victoria, the lowest through the year movement (3.0%).


Industry (original)

WPI - Annual and Quarterly changes: original, Total hourly rates of pay excluding bonuses - Industry, September quarter 2010
Graph: WPI—Annual and Quarterly changes: original, Total hourly rates of pay excluding bonuses—Industry, September quarter 2010


In the September quarter 2010, the highest All sectors quarterly movement was recorded by Accommodation and food services (2.0%) and the lowest quarterly movement was recorded by Mining (0.5%).

Increases through the year ranged from 2.3% for Information media and telecommunications to 4.4% for both Electricity, gas, water and waste services and Education and training. The through the year movement for Wholesale trade (2.5%) was the first increase in the through the year movement for this industry since the September quarter 2008.

In the Private sector, the through the year movement of 2.4% for Information media and telecommunications was the lowest of all Private sector industries this quarter.

In the Public sector, quarterly movements in the September quarter 2010 ranged from 0.7% for Electricity, gas, water and waste services to 1.8% for both Professional, scientific and technical services and Public administration and safety. The lowest through the year movement was recorded by Health care and social assistance (3.2%), while the highest was recorded by Professional, scientific and technical services (5.4%).


NON-WAGE PRICE INDEXES

Annual and public holiday leave

The change from the previous financial year for All sectors for 2009-10 was 6.2%. Changes in this index generally reflect wages growth and variations in public holiday entitlements. New South Wales recorded the largest increase in the change from the previous financial year for 2009-10 (7.0%) due to an additional public holiday in 2009-10 compared with 2008-09.


Superannuation

The change from the previous financial year for All sectors for 2009-10 was 3.4% compared with 3.7% for 2008-09. No changes to superannuation legislation occurred in 2009-10 so changes in this index mostly reflected increases in wages and changes in annual leave and public holiday entitlements.


Payroll tax

The change from the previous financial year for All sectors for 2009-10 was 1.5%. Tasmania and the Northern Territory both recorded the highest increase in the change from the previous financial year for 2009-10 (4.3%) while Western Australia recorded the largest decrease in the change from the previous financial year for 2009-10 (-2.8%).


Workers' compensation

The change from the previous financial year for All sectors for 2009-10 was 4.6%. Western Australia recorded the largest increase in the change from the previous financial year for 2009-10 (15.3%).


LABOUR PRICE INDEX

The change from the previous financial year for All sectors for 2009-10 was 3.4%. This was higher than the change from the previous financial year for 2009-10 for the wage price index (3.1%).



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