Will the Wage Price Index growth ease financial pressure for households?
The Wage Price Index’s quarterly increase of 0.8% has been met with mixed reactions. While Australian wages continue to increase, it was the smallest increase in two and a half years, providing minimal ease to the cost of living.
Heading into the holiday season, expenses inevitably increase for everyone. Australians have their fingers crossed that inflation will remain below 3% to alleviate some of the economic stress.
However, industry experts believe the easing of financial pressure may not come as quickly as some might hope.
Commenting on the current economic trends, Reward Gateway’s managing director APAC Kylie Green shares some insight on how employers can play a role in helping to mitigate the rising costs of living for their employees during these times.
“Today’s Wage Price Index increase will likely be widely welcomed by employees across Australia - particularly following the news that inflation has fallen to its lowest rate in three and a half years.
While these updates will ultimately encourage the loosening of purse strings, we must also acknowledge that they are not overnight solutions to the ongoing cost of living crisis.
Despite inflation rates slowing, the cost of most goods and services in Australia continues to rise. While lower petrol and power costs — driven by easing global oil prices and government rebates — have helped offset some of these expenses, they haven’t alleviated the pressure on day-to-day costs for most households.
This is likely felt the most in sectors with modest wage growth, such as arts and recreation, financial and insurance services, media and telecommunications, real estate and wholesale trade. These wage increases, while welcome, may fall short of keeping pace with the current inflationary trajectory. This is where employers come in.
74% of business and HR decision makers find it difficult to meet staff expectations for salary growth in the current economic climate. However, there are a number of impactful initiatives beyond a traditional pay increase, that can be used to help make their money go further. Especially in the lead up to the busy Christmas period.
One solution that can be easily integrated in businesses of all sizes, is employee discount programs - an affordable alternative to when a pay increase or Christmas bonus isn’t possible. These programs offer employees discounts for hundreds of retailers, covering everything from the weekly grocery shop to petrol and petcare. What's more, they’ve been proven to increase disposable incomes by 5 to 10%. That’s adding an extra $3,500 annually for an employee earning $70,000 for example! These benefits not only support teams in the short term, but can introduce long-term saving opportunities to help set them up for a strong 2025.”
