‘Inadequate’: Central Bank Staff Reject 10.5 Percent Pay Rise Offer

An ibis bird perches next to the Reserve Bank of Australia headquarters in central Sydney, Australia, on Feb. 6, 2018. Daniel Munoz/Reuters

The majority of staff at the Reserve Bank of Australia (RBA) have voted down a 10.5 percent pay offer, saying it failed to adequately address the current cost of living challenges.

The RBA offered its staff a pay increase of 10.5 percent over three years: a 4 percent increase from the start of the agreement, 3.5 percent from September 2024, and 3 percent from September 2025.

However, 57 percent of the RBA workforce voted to reject the central bank’s enterprise agreement offer, bringing both parties back to the negotiating table.

The Finance Sector Union (FSU) recommended its members vote no to the offer for falling below industry standards.

FSU National Assistant Secretary Jason Hall said the union hopes that the RBA will “substantially” increase the pay offer to meet the expectations of its workforce.

“We welcome the comments by the RBA in the wake of this vote that it is willing to return to the negotiating table,” he said.

But the bank warned staff they might not be back-paid for any wage rises if the proposal was rejected and the bargaining process continues past September, according to transcripts of an internal forum obtained by the Australian Financial Review.

“[Back-payment to September 2023] is contingent on a majority of employees voting in favour of the new agreement the first time it is put to a vote (and maybe off the bargaining table if the majority of employees do not approve the new agreement when given the opportunity to do so),” it said.

It comes after two of Australia’s “big four” banks, ANZ Bank and NAB, agreed to FSU’s demands for significant pay increases.

ANZ Bank and FSU reached an agreement that includes a pay rise of 16.5 percent over four years for workers earning under $100,000.

The union also endorsed NAB’s proposal for a 17.5 percent pay increase over three years for its lowest-paid workers and guaranteed pay rises for all workers up to the “high-income threshold.”

“More than 80 percent of NAB staff have now secured guaranteed fixed salary increases instead of relying on NAB’s market-based model which eroded our members’ standard of living,” FSU National Secretary Julia Angrisano said in July.

A man walks past a branch of the National Australia Bank (NAB) in Melbourne, Australia, on May 6, 2021. William West/AFP via Getty Images

Australia’s headline inflation currently sits at 6 percent, falling from its peak of 7.8 percent in December 2022.

The RBA forecasts that inflation will drop to about 3.25 percent by the end of 2024 and return to the target range of 2 to 3 percent by mid-2025.

‘Bargaining Must End’: RBA Governor

On Aug. 11, outgoing RBA Governor Philip Lowe told the Standing Committee on Economics that the institution had engaged in eight rounds of negotiations with the FSU.

“We’re now at a point where that bargaining has come to an end. We believe that the offer that we’re making to our staff is fair and reasonable,” he said.

“Given that the bargaining has come to an end we’re now proposing to seek the views of our staff directly.”

Rather than dragging out the negotiation process any longer, the RBA had deemed that speaking directly with staff was the better way forward.

“We want to pay our staff fairly and well and we want to be responsible. We think our offer meets those tests, but the FSU does not agree and we’re now proceeding to let the staff determine the outcome,” Mr. Lowe said.

“I wouldn’t say that we’re sidelining the FSU, but we’ve reached a point where the union has indicated to us that it would not support the proposal.”

Governor of the Reserve Bank of Australia Philip Lowe speaks during a press conference in Sydney, Australia, on May 3, 2022. Louie Douvis–Pool/Getty Images

Previously, Mr. Lowe allegedly advised the government against handing out wage increases that were not tied to increased productivity, warning it would further fuel inflation.

In May, the federal government offered public service employees the same 10.5 percent pay rise offer as given by the RBA.

This was also rejected by the Community and Public Sector Union for being unable to ease financial pressures.

They had called for a 20 percent pay rise over the next three years; a nine percent pay rise during the first year, followed by a six percent in the second and five percent in the third.