Following an increase in the cost of labour between June and September quarters 2020, based mainly around the end of payroll tax waivers, the Labour Price Index (LPI) rose a further 4.5% in December quarter 2020. While labour costs are increasing, they remain 5.9% lower than the pre-COVID levels recorded in March quarter 2020.
The growth in the LPI was predominantly driven by the reduction in the number of jobs eligible for the Jobkeeper subsidy, changes in the JobKeeper wage subsidy itself and the winding back of temporary wage reductions first experienced in June quarter 2020.
The private sector saw a rise in labour costs of 6.0% while the public sector recorded a rise of 0.2% in December quarter 2020. Private sector growth was driven mainly by the factors mentioned above, while the public sector was influenced by wage freezes.
|Quarterly movement||Through the year movement|
|Dec 2020||Sep 2020||Jun 2020||Dec 2020||Sep 2020||Jun 2020|