Finance Minister Katy Gallagher says a 3% pay rise for federal workers is a good deal

But overall wage growth is hampered by federal and state wage policies, with private sector wage increases outpacing those in the public sector by the widest margin since records began in the late 1990s.

Private sector growth of 3.4% – the fastest pace in a decade – accounted for most of the increase, while public sector wages held steady at 2.4%, below their pre-pandemic level.

The latest company-level agreement data from the Fair Work Commission showed EBAs covering around 37,000 workers struck in the month to October 21 included average wage increases of 3.55%.

The situation highlights the dichotomy at the heart of the Albanian government’s wage push, in which companies are accused of not offering decent wage increases while governments simultaneously offer less.

When asked on Sky whether civil servants should get pay rises above 3%, given Mr Burke’s comments 3.1% was not high enough, Senator Gallagher declined to back the comment.

“I don’t know if I said that,” she said.

Senator Gallagher said she wanted the Australian Civil Service to be a model employer in attracting new workers, and stressed that this could be achieved not just with pay but also with conditions.

The Albanian government is working on a new wage policy to replace the Coalition’s approach, which ties public wage increases to the private sector.

Catch-up element

Historically, the compensation of civil servants has exceeded that of their counterparts in the private sector. But since the beginning of 2021, the situation has reversed, which means that the Coalition’s policy would have resulted in a higher rate.

National Community and Public Sector Union Secretary Melissa Donnelly said she hoped for higher pay increases in negotiations next year.

Ben Philips, an associate professor at the Australian National University, said there would likely be an element of catch-up.

“Public sector wages are a bit sticky with company agreements holding them back and taking time to catch up, while the private sector is free to raise wages according to market needs,” a- he declared.

State budgets, which are heavily indebted, are based on lower wage growth than in the private sector.

The New South Wales government’s public sector wage policy is 3% in 2022-23 and 2023-24, but this includes a 0.5% increase in pension contributions each year, leaving take-home pay barely 2.5% higher.

The Victorian government’s wage policy provides for a 1.5% cap on wage increases in 2022, with a 2% increase available for parties whose current company agreements reach their nominal expiry date in 2022.

In the ACT, many civil servants are being offered pay raises of just 1% in 2023, with two increases of $1,750 at the start and end of the year. The split system means that workers with lower wages will receive higher wage increases.

For example, a worker earning $75,000 will receive a salary increase of about 5%, while a worker earning $150,000 will receive about 3%.

In Queensland, nurses were offered 4% a year for the next two years, then 3% the following year.