JobKeeper kept people in work and prevented widespread business failures during the coronavirus pandemic, but in future crises the Government should consider improvements, including a tiered wage subsidy, according to Treasury's evaluation of the landmark scheme.
The RBA says several new early indicators it has developed in-house are helping it to build a "fuller view" of wage movements ahead of the release of official figures.
The highly-orthodox IMF has told the RBA's annual research conference that it is "hard to find" recent wage-price spirals across advanced economies and that pay acceleration "should not be seen as a sign" that the corkscrew feared by the central bank "is taking hold", in a session in which new board member and former FWC president Iain Ross led discussion.
A senior Treasury Department official says the Federal Budget's forecast that inflation will drop back to 2% to 3% by mid-2025 assumes the FWC will make a minimum wage ruling that "broadly proxies" last year's increases.
The RBA is continuing to warn about the dangers of a wage-price spiral, saying the chances of it have declined, but could rise again if the FWC awards a "large" minimum rise this year or government employers ease or drop pay caps.
Multi-year enterprise agreements, flaws in the "standard" Wage Price Index measure and public sector pay caps partially explain recent low wages growth, which would otherwise have been up to one percentage point higher last year, according to new university analysis.
Agreements filed with the FWC for approval in the first half of February delivered an average pay rise of 3.1% a year, according to "real-time" data released this morning.
Economy-wide labour costs have risen modestly in the December quarter as workers' share of income maintains its rebound from record lows, according to ABS national accounts data released today.
Private sector rates of pay increased to 3.6% annually in the December quarter, up from 3.4% in the previous three-month period, according to the ABS, but relatively low public sector rises have restricted the economy-wide movement to 3.3%.
Wages in private sector agreements approved in the September quarter remained stuck at 2.9% a year, defying labour shortages and inflationary pressure, according to DEWR data.
