Public Sector Offered 10.5 Percent Pay Rise

Snow covered hills are seen behind Parliament House in Canberra, Wednesday, June 1, 2022. (AAP Image/Lukas Coch

The federal government has offered Commonwealth public servants a 10.5 percent pay rise over the next three years following negotiations.

This is the largest pay rise to be offered to Australian Public Service (APS) employees in more than 10 years and will see public servants get a four percent rise in the first year, 3.5 percent in the second year, and three percent in the third year.

“The Australian government is committed to providing APS employees with fair and equitable conditions of employment through genuine APS bargaining,” the federal government said in a statement.

“In addition to negotiating a set of common terms and conditions, we are also seeking to provide a fair and affordable pay rise for APS employees.

Australian Finance Minister Katy Gallagher and Treasurer Jim Chalmers arrive at a press conference during the Budget lockup at Parliament House in Canberra, Australia on May 9, 2023. Martin Ollman/Getty Images

“At the end of this process, APS employees can expect a package of pay and common conditions that better position the APS as a model employer and employer of choice.”

The federal government is said to have taken into account wages around the country, economic indicators, the labour market, and budgetary factors into consideration when making the decision.

Treasury forecasts inflation will decline to 3.25 per cent in 2024/25 and reach 2.5 per cent by 2026/27.

Public Sector Sets Ambitious Target

The move by the federal government comes after the Community and Public Sector Union (CPSU) had called for a 20 percent pay rise over the next three years, with public servants receiving a nine percent pay rise during the first year, followed by a six percent in the second and five percent in the third.

CPSU National Secretary Melissa Donnelly said that it was good to be engaging in genuine negotiations on pay and conditions.

“This time last year, APS workers were in the final days of what was a decade-long assault on the public service and public service workers,” Donnelly said.

“It has left the APS with workplaces, pay and conditions that simply don’t meet the standards of the modern labour market.”

She said that the CPSU had decided to request the 20 percent pay rise because it was necessary to rebuild the APS.

“I will say that our pay claim is ambitious because it has to be. To rebuild the APS, service-wide bargaining must deliver improvements to pay and conditions that are not ignorant to the consequences of the last decade,” she said.

“The public, public sector workers and the federal government need the APS to catch up and catch up quickly to meet the demands and competition that exist in the modern labour market.”

Federal Government Pursuing Public Service Reform

The pay offer comes after Finance and Public Service Minister Katy Gallagher announced on May 9 that the Albanese government would be embarking on an ambitious reform agenda for the APS.

“The Albanese Labor Government is making the necessary investments in the 2023-24 Budget to continue the job of rebuilding the service after ten years of neglect under the former Coalition government,” Gallagher said.

“The APS performs a critical role in our democratic system, it should be valued by the government and be focused on serving our citizens.”

As part of the 2023-24 Budget, the federal government will spend $10.9 million (US$7.3 million) to establish an in-house consulting function, $8.4 million to build the capability of the APS to address service-wide challenges, and $3.4 million to support the government’s commitment to achieving five percent First Nations employment by 2030.

Additionally, they will also spend $195.6 million to provide faster services and help address the backlog of claims for Veterans through enhancements to the Department of Veterans.