Since the minister spoke wage growth has plunged lower still, hitting 2.1 per cent for private sector wages in the year to September, the lowest result in records spanning back 18 years. So low is private sector wage growth that for the last year it has matched the Reserve Bank's measure of so-called underlying inflation, meaning the the buying power of wages has been frozen. Now a new set of ministers sees a different problem. As the wage price index was being released, Treasurer Scott Morrison told the Bloomberg Summit in Sydney that wage growth was too low. "We have a challenge around earning," he said. "We need to earn more and individuals earn more, so does the government. That's how we will deal with revenues."

Its problem is that if we are not earning much more, government revenue won't grow much. And it needs to if the budget is to have a hope of meeting its forecasts. The budget forecast wage growth of 2.5 per cent this financial year and 2.75 per cent in the year that follows. Although way down on the heady growth of 4.3 per cent at the peak of the mining boom, it would have brought in revenue the government's been counting on as Australians paid more tax and were pushed into higher brackets. Notwithstanding the Treasurer's talk about the evils of bracket creep, his immediate problem is that isn't getting as much of it as he expected. Stronger than expected employment growth is pushing up the number of people paying tax, but weaker than expected wage growth is holding back the amount they pay. The two are related. Employment is growing strongly in part because wage growth is weak. If employers wage budgets aren't being stretched they're not under as much pressure to cut back. They are able to keep workers and at times take on new ones.

It's the sort of flexibility that Eric Abetz was calling for in early 2014. Wages are adjusting extraordinarily well to economic conditions, and as a result employment is holding up. Wages in the mining and construction industries grew by just 0.4 per cent in the September quarter, a mere half the 0.8 per cent by which total private sector wages grew. It's what you would expect if the mining construction boom was coming to an end. Loading At the other end of the scale, retail wages climbed an impressive 1.2 per cent in the quarter. The national accounts show household saving down and household spending climbing. The consumer surveys point to the biggest spending Christmas in years. It suggests that whatever the Coalition's previous critiques of Australia's industrial relations system, it's doing the job they want, if perhaps a bit too well for the treasurer.