We’ve been complaining about wage growth for a year. Glad to see two of the nation’s top economists agree, calling for an end to the income recession that has stopped wages growth in its tracks.
Chris Richardson, a partner at Deloitte Access Economics, and independent analyst Saul Eslake both say strong jobs growth, rising profitability , and a gradual tightening in the labour market mean the primary drivers of wages growth are in place.
Hopes for wages growth – which has languished at or below 2 per cent for two years – are being supported by a flood of good economic news.
Even the Prime Minister is moving in behind the obvious – wage growth means economic growth.
The most recent national accounts, published for the September quarter in early December, show that real net national disposable income per capita rose 3.6 per cent in 2016-17 , after falling in each of the previous four years.
A chart published this week in Deloitte’s latest business forecast shows national income growth will average around 3 per cent a year as global GDP rises towards 4 per cent.
However, even though official figures show the overall employment-to-population ratio of people aged 16 to 65 years has reached a record high, unemployment probably needs to fall further before wages leap higher.
Prime Minister Malcolm Turnbull and Treasurer Scott Morrison have ramped up expectations the May budget will contain a package of income tax cuts for households in addition to the Coalition’s company tax package.
Power prices – stand by for a shock
Power prices have gone up 600 per cent – six times the average pay rise. This sector is not alone.
Fruit, fuel and holidays drove a consumer price rise of 1.9 per cent to December.
But there is some relief. Smaller electricity companies are gaining ground against the big energy retailers on price.
None of the three major energy retailers – AGL, Origin and Energy Australia – made it to the top of Canstar Blue’s 2018 survey of electricity companies.
The annual survey compares pricing, customer service, any discount offers and 9000 consumer reviews to rank power retailers across NSW, Victoria, Queensland and South Australia.
Canstar Blue editor Simon Downes says: “The trend across the states is that bigger retailers have had a tough year and people are trending towards smaller retailers with better support.”
However, despite this improved perception of smaller retailers, the big three still supply the majority of Australians on the east coast, accounting for 87 per cent of all electricity customers and 95 per cent of all gas customers.
In NSW, Red Energy was rated as the state’s top retailer, taking pole position for the fifth year in a row. Red Energy has an average annual bill cost of $2567.
In Victoria, Powershop rated five out of five in every category, ahead of 10 other retailers.
Powershop had an average annual bill cost of about $2625.
In Queensland, Alinta Energy rated highly in every category.
The WA-based company has an average annual bill cost of $1837 in Queensland.
The Commonwealth Bank shows its customers the finger – because it CAN
Here at at The Wrap, we try and steer clear of stories about Australia’s big four banks. We know, however horrific, we are unlikely to persuade you to switch to tier two institutions offering better interest rates, credit cards and customer service.
This week, two events really highlighted the difference between the banks.
The Commonwealth Bank has a new boss – the very same man in charge of the retail division, facing some of the most shocking allegations.
Most boards would have selected an outsider to give the appearance of a fresh start. Not the Commonwealth Bank. They picked one of their own.
After all, when you’re the Commonwealth Bank, who cares about public opinion.
Just 24 hours after his appointment, the bank was accused of trying to rig one of Australia’s key interest rates, in yet another blow to its damaged reputation.
The Australian Securities and Investments Commission launched legal action against CBA, alleging unconscionable conduct and market manipulation.
The legal action comes as CBA is already facing a slew of scandals, including an explosive court case alleging a mass breach of anti-money laundering and terror financing laws, a powerful prudential inquiry into governance and culture at the bank, and a royal commission into misconduct in the industry.
Good luck, Mr Comyn. We’d love to think you really care about your customers and will make change.
House prices – up or down?
Are house prices going up, or coming down?
Hard to discern as vested interests rig surveys and play with the numbers. Two surveys this week suggested starkly different views.
According to Core Logic, Sydney prices dropped three per cent in the last quarter (though they have surged 75 per cent since 2012.
According to Domain – which makes its money from selling homes – Sydney property prices went UP 0.5 per cent in the December quarter and annual growth slowed to four per cent.
Sydney’s median unit price is $736,900, while Melbourne’s median unit price was $506.079. Brisbane, still struggling against over supply, is at $385,955. Perth is running at $369,402.