The Australian Bureau of Statistics (ABS) reported that the wage price index (WPI) increased by 0.8 per cent in the December quarter, translating to an annual rise of 3.4 per cent, based on seasonally adjusted figures. However, with inflation at 3.8 per cent annually, real wages decreased by 0.4 per cent in the year to December. This marks the first decline in real wages since September 2023.
The quarterly wage growth matched the September quarter’s 0.8 per cent. The annual wage growth of 3.4 per cent was slightly up from the 3.3 per cent recorded in the September quarter, indicating a marginal acceleration in overall wage increases across the country.
Public sector wages experienced faster growth than the private sector for the fourth consecutive quarter on an annual basis. Public sector wages grew by 4 per cent in the year to December 2025, an increase from 2.8 per cent the previous year. Private sector wages rose by 3.4 per cent over the same period, also up from the 3.3 per cent growth recorded in the year to December 2024.
According to Michelle Marquardt, ABS head of prices statistics, the strong growth in public sector wages for 2025 was attributed to new state public sector agreements that included multiple pay rises throughout the year. These agreements have played a significant role in pushing public sector wage growth ahead of the private sector.
