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Mining wages growth declining

NEW data shows low average wages growth across the Australian economy and the resource industry.

The Australian Bureau of Statistics (ABS) reported the national Wage Price Index (WPI) rose 2.3% in the year to September 2015. The WPI for mining (which in ABS terms covers mining, oil and gas extraction) also rose 2.3% in the year, and 0.4% in the September quarter.

Wage Prince Index (WPI) Annual – Sep 2015  2.3%
WPI mining industry specific Annual – Sep 2015  2.3%
Quarterly WPI (original) September Quarter  0.8%
Quarterly mining WPI (original) September Quarter  0.4%
Consumer Price Index (CPI) Annual – Sep 2015  1.5%
Quarterly (CPI) September Quarter  0.5%
IMF forecast Australian avge CPI inflation From 2016 to 2020  Range from 2.4% to 2.6%
Enterprise Agreements – All Annual – June 2015  3.3%
Enterprise Agreements – Mining Annual – June 2015  1.9%

This represents a decline on previous years. Mining WPI was recorded at 2.8% in September 2014, and a much higher 4.4% in the year prior (2012-13).

Another source of wages information, the Trends in Enterprise Bargaining series published by the Department of Employment, shows private sector enterprise agreements on average providing for a 3.3% annual increase, and an average increase of 1.9% in the mining sector.

“The deceleration in mining wages growth comes as no surprise, particularly given highly volatile commodity prices are impacting the profitability of resource companies globally,” said AREEA senior industry policy adviser, Tristan Menalda.

“However, given that average mining salaries are significantly higher than the all-industries average, it must be put into context that a lower rise in the mining WPI compared to the national average, may still equate in real dollar terms to higher mining salary increases than those in other industry sectors.”

Prices remain muted, rising slower than wages

“With prices for a number of commodities forecast to remain suppressed in the near-term, and with mining companies focusing on safeguarding their bottom-line during turbulent times, more organisations would be expected to attempt to base future wage increases on increased productivity (both labour and capital),” Mr Menalda said.

“However, inflexibilities in the Australian labour market and the rules for bargaining under the Fair Work Act continue to make productivity based wage increases difficult and force productivity improvements off the bargaining table in too many instances.”

For more information, please contact Tristan Menalda on (03) 9614 4777 or [email protected].

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