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Wage Price Index, Australia

The WPI measures changes in the price of labour, unaffected by compositional shifts in the labour force, hours worked or employee characteristics

Reference period
June 2020
Released
12/08/2020
Future releases
  • Next Release 2/11/2020
    Wage Price Index, Australia, June 2020
  • Next Release 18/11/2020
    Wage Price Index, Australia, September 2020
  • Next Release 24/02/2021
    Wage Price Index, Australia, December 2020
  • View all releases

Key statistics

  • The seasonally adjusted WPI rose 0.2% in June quarter 2020. 
  • The seasonally adjusted WPI rose 1.8% over the year to June quarter 2020.
  • The seasonally adjusted Private sector rose 0.1% in June quarter 2020.
  • The seasonally adjusted Public sector rose 0.6% in June quarter 2020.

Main features

June key statistics

The seasonally adjusted WPI:

  • rose 0.2% in June quarter 2020. The lowest quarterly rise since the commencement of the series in September quarter 1997.
  • rose 1.8% over the year to June quarter 2020, dipping below the previous lowest annual rate of growth recorded in June quarter 2017 (1.9%).
     
 Mar Qtr 2020 to Jun Qtr 2020Jun Qtr 2019 to Jun Qtr 2020
% change% change
Wage Price Index (WPI)
Total hourly rates of pay excluding bonuses 
Trend(a)
 Australianana
 Sector
  Privatenana
  Publicnana
Seasonally Adjusted(b)
 Australia0.21.8
 Sector
  Private0.11.7
  Public0.62.1
Original
 Australia0.01.7
 Sector
  Private-0.11.7
  Public0.42.1
a. See Explanatory Notes paragraphs 39-40, 42 on the Methodology page.
b. See Explanatory Notes paragraphs 32-38, 42 on the Methodology page.
 

Sector

Quarterly seasonally adjusted:

  • The Private sector rose 0.1%.
  • The Public sector rose 0.6%.
     

Through the year

Through the year seasonally adjusted:

  • The Private sector rose 1.7% over the twelve months to the June quarter 2020.
  • The Public sector rose 2.1% over the twelve months to the June quarter 2020.
  • Both the Private and Public sector annual growth is the lowest recorded since the commencement of the series.
     
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Measuring the impact of Coronavirus (COVID-19)

The ABS published an article on 23 July 2020 (Measuring the Wage Price Index during the COVID-19 pandemic) explaining the impact of COVID-19 on the measurement of the WPI in June quarter 2020.

Wage subsidies (JobKeeper) and payroll tax changes fall outside of the collection scope of the Wage Price Index.

Suspension of trend series

The Wage Price Index trend series have been suspended from June quarter 2020 until more certainty emerges in the underlying trend in labour market activity over the COVID-19 period. This is in recognition of the time series shocks in the labour market between the March quarter 2020 and June quarter 2020 data points. While trend estimates are generally the best measure of the underlying behaviour of the labour market, any large changes in the labour market as a result of COVID-19 will likely make it difficult to estimate a reliable short-term indicator of the trend.

Existing spreadsheets containing trend, seasonally adjusted and original data will continue to be published in the same format, however trend columns will be populated with ‘na’.

Quality

It is important to note that the reference period for the June quarter was the pay period on or before 15 May 2020, which was after a global pandemic was declared and during the peak period of nation-wide restrictions that impacted business activity. There was no notable impact on survey collection operations or the quality of June quarter data, with the response to the survey at a similar level as previous quarters.

Use of price indexes in contracts

Price indexes published by the Australian Bureau of Statistics (ABS) provide summary measures of the movements in various categories of prices over time. They are published primarily for use in Government economic analysis. Price indexes are also often used in contracts by businesses and government to adjust payments and/or charges to take account of changes in categories of prices (Indexation Clauses).

Use of Price Indexes in Contracts sets out a range of issues that should be taken into account by parties considering the inclusion of an Indexation Clause within a contract utilising an ABS published price index.

Frequently asked questions

The Wage Price Index FAQs page has answers to a number of common questions to do with price indexes and the Wage Price Index, in particular.

Commentary

In June quarter 2020 wage growth was recorded for jobs with scheduled increases (enterprise agreement and award based jobs) offsetting this growth were falls for the more informal agreements. These informal agreements are more sensitive to labour market changes.

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Main contributors

Main state and territory contributors to wage growth were:

  • South Australia mostly driven by the public sector, and
  • Western Australia based on moderate private sector growth.
     

Offsetting falls occurred in:

  • Victoria, where private sector wage falls more than offset moderate public sector growth.
     

Main industry contributing to wage growth was:

  • Education and training.
     

Offsetting falls occurred in:

  • Professional, scientific and technical services, and
  • Construction.
     

Wage growth by state or territory

Original estimates:

  • South Australia recorded the highest quarterly rise of 0.4%.
  • Victoria recorded the only quarterly fall of -0.1%.
  • South Australia and Tasmania recorded the highest through the year rise of 2.4%.
  • Western Australia recorded the lowest through the year rise of 1.6%.
     
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Wage growth by industry

Original estimates:

  • Electricity, gas, water and waste services recorded the highest quarterly rise of 0.6%.
  • Other services recorded the largest quarterly fall of -0.9%.
  • Arts and recreation services recorded the highest through the year rise of 2.6%.
  • Construction recorded the lowest through the year rise of 0.8%.
  • This is the first quarterly fall in industry wages since the commencement of the series in September 1997.
     
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Spotlight - wage reductions

Data collected on wages and salaries in June quarter 2020 highlighted the unprecedented impact of social distancing measures and restricted business activities. The COVID-19 pandemic has resulted in large price changes for a number of jobs. Private sector businesses reported genuine market-based reductions in jobs paid by individual arrangement to ease financial pressures. These agreements are more sensitive to labour market conditions.

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June 2020 quarter WPI reported a higher proportion of wage reductions for Manager and Professional roles than for other occupations.

At an industry level, the Professional, scientific and technical services, Construction and Rental, hiring and real estate services industries had the highest proportions of wage reductions.

Data downloads - time series spreadsheets

I-Note

The wage price indexes in Tables 1, 2b, 3b, 4b, 5b, 7b, 8b and 9b are updated and released every quarter. The corresponding financial year wage price indexes in Tables 2a, 3a, 4a, 5a, 7a, 8a and 9a are updated and released each June quarter for the preceding financial year. There are no financial year indexes created for Table 1.

Table 1. Total hourly rates of pay excluding bonuses: sector, original, seasonally adjusted and trend

Table 2a. Total hourly rates of pay excluding bonuses: all sectors by state, original (financial year index numbers for year ended June quarter)

Table 2b. Total hourly rates of pay excluding bonuses: all sectors by state, original (quarterly index numbers)

Table 3a. Total hourly rates of pay excluding bonuses: private sector by state, original (financial year index numbers for year ended June quarter)

Table 3b. Total hourly rates of pay excluding bonuses: private sector by state, original (quarterly index numbers)

Table 4a. Total hourly rates of pay excluding bonuses: public sector by state, original (financial year index numbers for year ended June quarter)

Table 4b. Total hourly rates of pay excluding bonuses: public sector by state, original (quarterly index numbers)

Table 5a. Total hourly rates of pay excluding bonuses: sector by industry, original (financial year index numbers for year ended June quarter)

Table 5b. Total hourly rates of pay excluding bonuses: sector by industry, original (quarterly index numbers)

Table 7a. Hourly rates of pay including bonuses: sector, original (financial year index numbers for year ended June quarter)

Table 7b. Hourly rates of pay including bonuses: sector, original (quarterly index numbers)

Table 8a. Ordinary hourly rates of pay excluding bonuses: all sectors by state, original (financial year index numbers for year ended June quarter)

Table 8b. Ordinary hourly rates of pay excluding bonuses: all sectors by state, original (quarterly index numbers)

Table 9a. Ordinary hourly rates of pay excluding bonuses: sector by industry, original (financial year index numbers for year ended June quarter)

Table 9b. Ordinary hourly rates of pay excluding bonuses: sector by industry, original (quarterly index numbers)

All WPI series: original (quarterly index numbers)

All WPI Series: original (financial year index numbers for year ended June quarter)

All time series spreadsheets

Data downloads - data cubes

63450. Distribution of expenditure on wages, wage price index, Australia

Previous catalogue number

This release previously used catalogue number 6345.0.