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Real Wages Creeping Up

This week the Australian Bureau of Statistics (www.abs.gov.au) released Average Weekly Earnings figures. They show Australian average wages of $48,760pa, an increase 5.5% in the year to December quarter 2003. This increase is 3.1% ahead of prices(CPI). On a 10 year rolling period basis, Wage increases are now averaging more than 2%pa ahead of prices. You can produce these trend line graphs on the FinDem Research Centre. Do the graph at 1983 plotting wages and family budget(CPI) over 20 years and you will see the last wages blow out which arose in the late 1960's to early 1980's.

Perhaps this latest trend is showing pressure of employees needing to catch for income tax bracket creep and GST. Since the tax cuts introduced in the year prior to GST(1999/2000), the tax paid by the person on average wages as a percent of wages, has increased from 22.4% to 24.5%. You can also study bracket creep at the FinDem Research Centre.

Posted Saturday, 28 February 2004

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