"Today's wages data points to the urgent need for productivity uplifts to ensure real wages growth remains sustainable," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
ABS data shows wages in Australia grew by 3.4% p.a. in the June quarter. With consumer inflation of 2.1% in the same period, this points to a material increase in real wages during the quarter.
Wages growth was pushed up by the public sector, which saw a 3.7% p.a. increase against private sector growth of 3.3% p.a. Enterprise agreement (3.9%) and awards (3.4%) outran market-based wages growth (3.1%).
"It's good news to see real wages growth continue in Australia – but we need to make sure this is sustainable. And it won't be if our productivity woes aren't immediately corrected," Mr Willox said.
"As the RBA warned in its Statement on Monetary Policy yesterday, productivity growth underpins the long-term sustainability of real wages growth. When productivity is weak, strong wages growth will simply drive up inflation, eroding the real gains for employees.
"If we want to keep real wages growing, we need to get productivity back on track. The RBA's downgrading of its productivity assumption from 1.0% to 0.7% annual growth should be a wake-up call regarding the impacts of the challenge.
"The Treasurer's Economic Reform Roundtable next week should heed this urgency, and seek to mix short-term wins with long-term visions for a higher-productivity Australia," Mr Willox said.
