ANALYSIS
No wonder we're feeling squeezed. It's not that prices are climbing fast, the latest consumer price index has them advancing 2.9 per cent a year. It's that wages are growing at their slowest pace in the 18 years the Bureau of Statistics has been keeping records.
The wage price index grew just 2.6 per cent in the year to March. Prices climbed 2.9 per cent. It means we're going backwards.
Two years ago, when Tony Abbott and others were complaining about the carbon tax and telling us we were going backwards, wages were climbing 3.7 per cent.
Wages follow the jobs market. When employment is barely growing, wages barely grow. It's hard to ask for a pay rise if there are few options elsewhere.
Mining has fallen from an almighty height. Two years ago, mining wages were soaring 4.6 per cent. Now they are climbing 2.4 per cent. Two years ago, wages in the professional, scientific and technical services industries that support mining were climbing 4.3 per cent, now they are climbing 1.8 per cent. Two years ago, retail workers were enjoying gains of 3 per cent, now it's 2.4 per cent. Two years ago, real estate agents were receiving wage gains of 4.3 per cent, now it's 2.8 per cent.
It's far from the best time to ask them to make sacrifices for their country, as Treasurer Joe Hockey did again on Wednesday while addressing the Australian Council of Social Service.
As the Treasurer was speaking, the second consumer-sentiment survey in two days hit the streets. The monthly Westpac-Melbourne Institute survey is more respected than the weekly ANZ-Roy Morgan survey. The ANZ reported a slide in consumer confidence of 3.2 per cent since the budget. Westpac reported a slide of 6.8 per cent.
The number of people saying they feel good about their family finances slid 23 per cent. When asked directly what the budget had done to their family finances, 38 per cent said it had harmed them. Only 3 per cent said they expected them to improve.
Confidence is back down to where it was in the middle of Julia Gillard's term in office in 2011, before the Reserve Bank cut interest rates eight times in a bid to restart activity.
Confidence might turn up. That often happens after unpopular budgets, but it's far more likely to happen if we are feeling cashed up.
