Federal Labor is poised to reignite the cost of living debate ahead of the election after new figures confirmed real wages were moving backwards due to surging inflation.
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Latest wage price index figures revealed annual wages rose 2.4 per cent to the March quarter, highlighting workers' pay has not kept pace with recent inflation, which annually is running at 5.1 per cent.
Labor leader Anthony Albanese in his speech to the National Press Club flagged the declining purchasing power was a direct result of the Coalition and the biggest cut in two decades.
Left leaning think tank The Australia Institute dubbed it the worst real wage decline in 20 years, while Mr Albanese tried to further push the scare campaign that low wages were a deliberate feature of Prime Minister Scott Morrison's economic management.
"Under Scott Morrison real wages are plummeting while the costs of living are skyrocketing," he said.
"And remember this government said that low wages were a key feature of their economic architecture."
The figures unveiled by the Australian Bureau of Statistics on Thursday showed wages were growing their fastest rate since mid 2018.
Over the quarter, the wage price index rose 0.7 per cent.
Recent inflation surges have been fuelled by a number of global factors including supply shortages and the Ukraine invasion which has put upward pressure on oil markets.
Domestically, this has put upward pressure on the price of food, fuel and materials.
Economists believe the figures will see the RBA invoke another cash rate hike in June, which will further impact the servicing costs of mortgages and loans.
ANZ in its take on wages believes the rise would see the RBA lift the cash rate by 25 basis points, which is more modest than the 40 to 50 basis point rise touted by the market.
The major bank also noted the RBA would be looking to labour force figures released on Thursday and national accounts on June 1, before a decision is taken.
Labour force figures are expected to see an unemployment rate printed to 3.9 per cent, the lowest level since 1974.
KPMG senior economist Sarah Hunter said wage growth was soft and there was still an erosion of wages in real terms.
"While this reflects the weak pace of wage growth seen in the second half of 2021, it is still relatively soft, with many in the market having expected annual growth to move closer to 3 per cent today," Dr Hunter said.
"It is off the pace with regard to price inflation, meaning real wage erosion is still happening."
Wages in the private sector rose faster than the public sector, which recorded an annual rate of 2.2 per cent.
Australia Institute senior economist Matt Grudnoff said record low unemployment rate did not appear to have induced any major increase in wages.
"(Wednesday's) figures confirm the worst real wage decline this century. The latest release of the wage price index shows that over the last 12 months real wages have fallen 2.5 per cent," he said.
Annual inflation to the March quarter rose 5.1 per cent and the Reserve Bank expects it go even higher, touting a rise by more than 6 per cent over 2022.
Finance Minister Simon Birmingham said inflation was the driving factor pushing up cost pressures, but Australia's inflationary rise was less in comparison to other economies such as the United States, Germany and New Zealand.
ABS head of prices statistics Michelle Marquardt said the wage index has risen for five consecutive quarters.
"Wage growth is influenced by both the size of changes in hourly wage rates and the proportion of jobs recording a change," Ms Marquardt said.
"In the March quarter of 2022, the average size of private sector hourly wage rises increased to 3.4 per cent, the highest quarter increase since June 2013."
Annual wages in the prior quarter rose 2.3 per cent.
The ACT and Tasmania recorded the highest annual wage growth, with both jurisdictions rising 2.8 per cent.
The market was signalling a 0.8 per cent quarterly rise, while annual wages were tipped to grow 2.5 per cent.
Earlier, Prime Minister Scott Morrison said he wanted to see wages increase and boasted a Coalition government would see a faster pick up in pay.
"Wages are going to go up because unemployment is coming down," he said.
"The way wages goes up, is when you get unemployment down and you get businesses that are able to earn more so they can afford and pay higher wages.
"Now I want to see wages go up. I want to see the minimum wage go up. Of course I do."
At Parliament House, Labor industrial relations spokesman Tony Burke argued the Coalition was purposely trying to keep wages low.
"No matter what economic statistic comes out, Scott Morrison's answer will be the same - low wages," Mr Burke said.
"They promised it. It was a design feature."
