20/08/2008 - 22:00

Boom lifts average pay packets

20/08/2008 - 22:00

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The resources boom is helping to feed pay packets across Western Australia, with the state recording the highest increase in wages over the past year as average mining sector salaries pushed past $100,000 for the first time.

The resources boom is helping to feed pay packets across Western Australia, with the state recording the highest increase in wages over the past year as average mining sector salaries pushed past $100,000 for the first time.

Data released from the Australian Bureau of Statistics last week showed the average mining sector wage grew by just over 10 per cent over the 2008 financial year to $100,823.

While the mining sector continues to deliver the goods to employees, Commsec chief equities economist Craig James said the key challenge for mining companies was to keep a lid on cost pressures.

"The mining sector needs to ensure that the extra workers pay their way in higher output," Mr James told WA Business News.

Despite the concerns of output matching the higher pay structures, Mr James believes demand for Australia's resources will remain strong for years to come.

He said evidence of this could be seen in TCL Corporation, China's biggest consumer electronics manufacturer, where demand for flat screen televisions was up 400 per cent over the past year.

"In the industries [mining and construction] that are going gangbusters, employers are prepared to pay top dollar for the sought-after staff," Mr James said.

"But for businesses dependent on consumer spending, it is an entirely different situation.

"Consumers are keeping a tighter hold on their wallets, causing businesses in the hospitality sector to cut wages in order to control costs."

As a result, the average wage in the hospitality sector fell 1.9 per cent from the previous year, with pay packets now standing at $43,202.

Rounding out the bottom three were retail trade with an average salary of $44,382, and the manufacturing sector with $54,824.

While the state's resource boom has pushed up the pay packets of people working in the mining sector, it doesn't come close to those holding the political reins.

Last week, WA's Salaries and Allowances Tribunal approved a 4.2 per cent pay rise to members of parliament, despite both the Labor and Liberal parties saying they did not deserve one.

WA's politicians will now receive a base pay of $128,980, making them the highest paid in the country.

Meanwhile, the average wage in WA rose 8.5 per cent from a year ago to $65,957, which Commsec said was $6,500 above that of the previous premier state New South Wales, which climbed 1.2 per cent to $59,924.

The Australian Capital Territory beat WA to claim the number one spot with an average wage of $69,768.

The country's other boom state, Queensland, recorded a 4.9 per cent rise to $55,567, the Northern Territory was up 5 per cent to $56,924 and Victoria climbed 4 per cent to $57,897.

Across the nation, the average pay packet stands at $58,833 a year or $1,131 a week, up 4 per cent in the year to May.

The wages growth was in line with consumer sentiment, which moved away from 16-year lows by rising 9.1 per cent in August. Much of this was due to falling petrol prices and the possibility of interest rate cuts.

Economists say the pay rise is good news for homeowners, with the figures no barrier to a potential rate cut next month.

"While the data may argue against a more aggressive 50-basis point cut in September, a 25-basis point move looks likely," RBC Capital Markets senior economist Su-Lin Ong said.

The board of the Reserve Banks of Australia will next meet on September 2.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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