The pay packets of Australians has grown in real terms for the first time since March 2021.

Figures released by the Australian Bureau of Statistics on Wednesday showed that the annual growth in wages over the year to December 2023 was 0.1 percentage points greater than the annual rate of inflation (wages were 4.2 per cent and inflation was 4.1 per cent).

Treasurer Jim Chalmers welcomed the news.

“Real wages growth is back, and ahead of schedule,” he said.

“These are very welcome and very encouraging numbers, but we know people are still under pressure, which is why our cost of living tax cuts are so important.”

Australian wages rose 0.9 per cent in the three months to December, down from the record-breaking 1.3 per cent quarterly growth through to September.

The December result was the highest annual growth since March 2009.

Private sector wages lifted 0.9 per cent, the same pace as in the quarter before.

In the public sector, salaries lifted 1.3 per cent – the highest quarterly rise in 15 years.

ABS head of prices statistics Michelle Marquardt said for both the private and public sectors, wages growth was driven by organisation-wide annual wage and salary reviews.

“Wage growth for December quarter 2023 saw a higher contribution from jobs covered by enterprise agreements than is typically recorded for a December quarter,” she said.

“Higher growth in the public sector was primarily due to newly implemented enterprise agreements for essential workers in the health care and social assistance and education and training industries following changes to state-based wages policies.”

EY senior economist Paula Gadsby said the RBA did not have a lot of “wriggle room” after the result.

“Wages growth has now passed the forecast peak, ahead of time,” she said.

“The Reserve Bank’s outlook rests on productivity growth returning to its long-run average, and there is no guarantee this will happen. On top of this, domestic cost pressures and international factors remain a risk for inflation staying above the 2-3 per cent target band. This means we’re not completely out of the woods just yet.”

– with AAP