In the past quarter, inflation in Australia was worse than expected, which also lowered the RBA's interest rate cut expectations. But at the same time, wage earners are more desperate to get a pay rise to keep up with the rising cost of living.
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According to the Australian Bureau of Statistics, the consumer price index (CPI) rose by 1% in the first quarter of 2024, up from 0.6% in the fourth quarter of last year, and also exceeded the 0.8% increase forecast by economists, while also raising the annual headline inflation rate to 3.6%.
According to Canstar's analysis, this means that Australians earning $98,218 a year in the past year will need a pay rise of $3,536 to keep up with inflation.
For people earning $70,000 a year, their wages need to increase by $2,520 to cope with higher prices. People with an annual income of $110,000 will need a salary increase of $3,960.
The high-income group, earning $130,000 a year, will need a $4,680 salary increase to keep up with the cost of living. Those earning $210,000 a year will need a $7,560 raise.
Steve Mickenbecker, executive officer of Canstar Financial Services Group, said: "If you haven't changed jobs in the past year, or your boss hasn't given you a raise, you may need to take steps yourself to make up for it, which is in fact a common situation for many Australian salaried people. ”
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"Depending on Canstar's cost of living comparison, switching to the cheapest or most cost-effective option like a mortgage, car insurance, electricity, internet, phone plans, and even weekly grocery shopping can save money. ”
"By making these changes, you could potentially save almost $12,741 in the first year alone, reducing the financial pressure on household budgets caused by inflation. ”
Australian employees generally want a pay rise this year, whether they're working in the office or from home.
Almost two-thirds of employees said they would like to receive a commuter allowance or fuel allowance if they are asked to come to the office. At the same time, more than half of employees prefer to receive a home office equipment allowance from their employer, and 61% of employees want to receive a financial subsidy for working from home if they are working in a hybrid mode.
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Nicole Gorton, director of Robert Half, said: "Employees no longer see certain benefits as additional benefits, but as an expectation. "However, there is not much alignment between employers and employees.
According to the survey, businesses plan to offer additional vacation benefits, company equipment, and increased pensions, but employees value money-related benefits like health insurance, flexible benefits programs, and additional bonuses. At the same time, Australians continue to be hit by rising prices, suggesting that their salaries need to increase further.
The most significant price increases in the first quarter of this year were a 2.1% increase in rents, a 6.1% increase in secondary education, a 6.5% surge in tertiary education, and a 2.3% increase in health and hospital services.
Mr Mickenbecker warned that Q1 growth could not only delay interest rate cuts until 2025, but also allow central banks to put rate hikes back on the agenda.
"The last 18 months have made the community feel how tight inflation is, and that's something the Reserve Bank has been very clear about. ”
"Unfortunately, mortgage holders and renters are feeling the most pain, and they may suffer even more if the March outcome leads to another cash rate hike. ”
"For a $600,000 30-year loan, every 0.25% increase in the cash rate increases the average monthly payment by about $100. This is especially distressing when the price of almost everything else is rising. ”