Australian pay rises wiped out as cost-of-living outpaces wage growth

Australians have officially gone backwards over the past year, as a boost in wages was not enough to meet the rising cost-of-living.

Fresh figures released by the Australian Bureau of Statistics on Wednesday show quarterly wages were up 0.8 per cent and are now up 3.2 per cent for the year.

But despite the pay bump, on average workers are going backwards as yearly wage rises did not match the yearly inflation rate of 3.8 per cent over the same period.

Prior to Wednesday’s official figures, markets were predicting wage growth of 0.8 per cent for the quarter or 3.2 per cent over the year.

Quarterly wages growth has been steady at 0.8 per cent since Q3 2025, broadly consistent with little change in labour market slack over that period.

Originally published as Australian pay rises wiped out as cost-of-living outpaces wage growth