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Victorian workers continue to feel the effects of last year’s lockdowns and restrictions in their pay packets with the state lagging behind the rest of Australia in the latest official annual wage growth figures.
The data from the Australian Bureau of Statistics shows workers’ pay growing by a sluggish 1.3 per cent in the 12 months to December 30.
It came as Moodys moved on Tuesday to change its rating on Victoria from the highest aa3 to aa1, saying the double downgrade was sparked by a “marked erosion in Victoria’s governance of its public finances”, with the agency predicting the state’s debt – due to hit nearly $47 million this year – would remain high until the end of the decade.
Moodys’ move had been widely expected since the other main ratings agency, S&P, downgraded Victoria in December and Treasurer Tim Pallas shrugged off the news, saying the government made no apology for borrowing heavily to cushion the state from the worst of the pandemic crisis.
The national wages picture in the Bureau of Statistics’ Wage Price Index update showed growth across Australia of 0.6 per cent in the December quarter, well in excess of general expectations. Victoria and the Northern Territory led the way in short-term growth, each improving .07 per cent on the previous three-month period.
But the annualised results were less positive for Victorian workers, with the bureau saying the state’s response to the COVID-19 health crisis had limited wages growth.
“Victoria recorded the lowest annual rise of 1.4 per cent for the second consecutive quarter, with social distancing measures and business restrictions limiting annual wage growth for the state,” the ABS noted.
The Victorian Liberal opposition was on the attack on Wednesday over the Moodys downgrade with Treasury spokeswoman Louise Staley saying Moodys’ decision was an indictment on the financial management of the Andrews government.
“This is a significant worry for Victoria moving into the future,” Ms Staley said.
“Moodys specifically said we do not have the flexibility to deal with any future shocks.
“In other words the cupboard is bare.”
Mr Pallas said he was using the state budget and Victoria’s borrowing capacity to guide the state through the pandemic crisis.
“We make no apologies for using our balance sheet to protect household budgets and support Victorians. As the economy strengthens, our budget position will strengthen,” the Treasurer said.
“At the end of the day, our agency ratings are important, but they’re not as important as seeing Victorian families and businesses through this crisis and making sure they have what they need to get through it.”
With Shane Wright
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