Days out from an election Labor leader Bill Shorten has called a "referendum on wages", Scott Morrison is confident more people finding jobs will lead to businesses increasing pay.
That comes despite the unemployment rate creeping higher for the second month running, with data released by the Australian Bureau of Statistics on Thursday putting it at 5.2 per cent.
The prime minister expressed his optimism in an address at the National Press Club in Canberra.
Mr Morrison pointed to how the wages have already grown over the coalition's tenure, since he was treasurer, as the jobless rate was tempered.
"The wage price index has risen from 1.9 to 2.3. So we've already seen the tightening in the labour market achieve that modest improvement," he said on Thursday.
"It's something the Reserve Bank governor has often referred to and he has forecast that that trend will continue into the future, and I also have that view."
Mr Morrison argues Labor's plan to reform some tax concessions will stilt that progress.
Australia's unemployment rate rose 0.1 percentage points in April to 5.2 per cent, according to Thursday's seasonally adjusted data.
An increase in the monthly participation rate more than offset the 28,400 rise in total employment for the month, with the figures also showing a 21,200 increase in the number of people without work.
The worse-than-expected result has added pressure on the Reserve Bank to deliver an interest rate cut.
Shadow treasurer Chris Bowen said greater effort is needed to get wages moving and more people into work.
"The main thing out of today's job figures is it confirms significant under-utilisation in the job market," Mr Bowen told reporters in Sydney.
"We have 1.8 million Australians either wanting more work or wanting work in total.
"This comes on top of the wages figures which continue to be disappointing."
Australian Associated Press