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A passenger whose alleged bomb threats forced an international flight back to Sydney will remain behind bars after a court appearance was delayed because of mental health concerns.

Muhammad Arif, 45, was charged with one count each of making a false statement about a threat to damage an aircraft and failing to comply with cabin crew safety instructions.

The Canberra man was set to appear before Downing Centre Local Court on Tuesday morning, but he would not cooperate with officers.

"Apparently, he is refusing to come out of his cell and they'll have to extract him if he is to come to court," magistrate Greg Grogin said.

"We won't force him out of his cell."

The court proceedings were adjourned three times before Mr Grogin formally refused him bail.

Arif's lawyer, Mostafa Daoudie, said his client had "serious mental health issues" and didn't seem to understand the situation he was in.

Mr Daoudie planned to make an application for Arif to be assessed before being brought to court, adding his client was "not in the right state of mind".

Arif's case will return to court on Wednesday, when his legal team is expected to make a bid for his release.

The mid-air drama unfolded after flight MH122 left Sydney Airport for the Malaysian capital of Kuala Lumpur on Monday afternoon.

The pilot turned the plane around while it was over northwest NSW after Arif allegedly began yelling, making references to Islam and gesturing at a backpack he was wearing on his chest.

The plane returned to Sydney about 3.45pm before a three-hour standoff on the tarmac ended with Arif's arrest.

Passenger Edo Kahn said the situation on board escalated after the plane took off and the man began praying "really loudly".

"People thought maybe he was just scared of flying initially, but then it just sort of got worse as things progressed and the whole situation with him not letting go of his bag," he said.

Velutha Parambath, who was travelling with his young family, said the passenger began saying "Allahu akbar" and pointing to a bag next to him as the plane started taking off.

Others on board the flight said the man yelled at flight attendants, made threats and knelt in the aisle of the aircraft.

The 194 passengers and five crew were evacuated from the A330 aircraft and taken to the terminal unharmed.

But some criticised the AFP for the time it took officers to board the plane and arrest the man after the flight returned to Sydney.

"They could have disembarked us, they could have done something," Mr Parambath said.

"We were just isolated at the end of the runway and that was the scariest of all.

"If the plane actually had a bomb, I don't think we would be here today."

The AFP said officers acted once it was safe to do so.

NSW Police Commissioner Karen Webb praised the work of the flight crew, adding the three-hour response time for officers to enter the plane and arrest the man was "pretty good".

"We can never presume anything and you don't know whether this person was acting alone or he actually had other support on the plane or outside the plane," she said.

"The protocol in Australia is to negotiate, we don't storm planes, this is not TV, it's not the movies - we want to protect the lives of all passengers."

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Real wages have not gone backwards for the first time in three years.

The wage price index, released by the Australian Bureau of Statistics on Tuesday, rose by 0.8 per cent in the June quarter.

This compares with the consumer price index - a measure of the cost of living - which grew by 0.8 per cent in the June quarter.

The annual figure came in at 3.6 per cent.

Private sector wages rose 0.8 per cent and public sector wages were up 0.7 per cent.

"For the third consecutive quarter, wages grew 0.8 per cent," ABS head of prices statistics Michelle Marquardt said.

"Wage rises from regular June-quarter salary reviews were higher than in the same period last year, as recent cost-of-living and labour market pressures were incorporated into organisation-wide decisions on wages."

Treasurer Jim Chalmers said Australia was seeing the wages growth Labor had committed to before the election.

"One of our key objectives in our economic plan was to get wages moving again, and this is the first time that real wages haven't gone backwards, in a quarterly sense, for three years and so that is progress," he told reporters.

"We've taken a different approach and that's why the wages outcomes under this Labor government have been so much better and so much stronger than under our predecessors."

Shadow treasurer Angus Taylor said real wages had gone backwards in every quarter on an annual basis since Labor came to government in 2022.

"The government needs to bring inflation back to band (two-to-three per cent) by reining in spending, support economic growth through deregulation and driving productivity reform to increase real wages," he said.

Compared with a year ago, fewer jobs had wage hikes in the June quarter but on average, the increases received were higher.

The share of jobs receiving increases above three per cent was the highest in a June quarter since 2012.

Annual wages growth of 3.1 per cent for public servants was the highest for the sector since the March quarter of 2013, as enterprise bargaining agreements kicked in.

The main drivers of private sector wage growth over the quarter were construction (up 1.3 per cent) and professional, scientific and technical services (up 0.7 per cent).

The arts and recreation industry recorded the highest annual growth, coming in at 4.5 per cent.

Oxford Economics Australia's Sean Langcake said it was a surprisingly slow pace given the very low jobless rate.

"Having paused in August, we do not think these data alone will spur the Reserve Bank into another rate hike in September," he said.

EY senior economist Paula Gadsby said the latest Reserve Bank minutes, also released on Tuesday, indicated the August decision had been based on inflation easing more than expected in the June quarter, consumption slowing significantly, and an improvement in labour availability.

"But there is still concern about low productivity growth and higher unit labour costs, which could fuel inflation once again," she said.

"For now, the Reserve Bank will continue to remain alert, but not alarmed ahead of their next meeting in September."

KPMG chief economist Dr Brendan Rynne noted wage growth was broad-based at a state level.

"The lowest quarter-on-quarter wage growth was observed in Tasmania at 0.4 per cent, while other states and territories recorded at least 0.5 per cent quarterly growth," he said.

© AAP 2023

Four Australians missing in waters off Indonesia's Aceh province have been found alive after their boat was lost in a storm.

Steph Weisse, Will Teagle and Jordan Short were found floating in the water on Tuesday after their boat failed to return from a trip to Pinang Island two days earlier.

Their companion, Elliot Foote, was found a short time later after going for help.

Mr Foote's father, Peter, told ABC TV his son had paddled away from the group, who were clinging to their surfboards, to try to reach an island and raise the alarm.

"They were all bobbing around ... I don't know what happened to the vessel," he said.

"Elliott grabbed a board and paddled off to get help, you don't blame him.

"Two full nights they spent out there and a whole day."

Mr Foote then read a message sent by his son: "Hey Dad. Elliot here. I'm alive. Safe now. Love you. Chat later."

The relieved father said an Australian living in the area had found the group after volunteering to use his catamaran for the search.

"Thanks to the Aussie guy on the catamaran who volunteered his time ... he searched all last night and he knows the waters really well, he lives over there and he was the one who found them," Mr Foote told Seven News.

The group of Australians left in a wooden speedboat around Sarang Alu and Banyak islands in Aceh's Singkil district on Sunday but failed to return.

They were part of a group of 12 Australian nationals and five Indonesians who were travelling to Pinang Island in two vessels.

It is unclear whether the Indonesian crew of the vessel have also been located.

The area is known as a tourist destination with white sand beaches and good waves for surfing.

The boats left North Nias port on Nias island, around 150km from Indonesia's Sumatra island on Sunday afternoon, before being hit by bad weather and heavy rain.

Ten people in one boat sought shelter on Sarang Alu island, while the others continued the trip, Nias Search and Rescue Agency said in a statement on Monday.

The resort on Pinang Island later reported to the agency that the boat with 10 passengers had safely arrived, but the other boat had not been seen.

Indonesia is an archipelago with more than 17,000 islands, and ferries and boats are a common form of transportation.

With lax safety standards and problems with overcrowding, accidents occur frequently.

© AAP 2023