Australian public servants offered 9 per cent pay rise over three years, union wants 15 per cent raise

Australia’s 200,000 Federal public servants are being asked to vote on an Albanese Government offer of a 9 per cent pay rise over three years, as their Labor-affiliated union pushes for a much bigger 15 per cent increase to account for high inflation.

The Australian Public Service Commission on Tuesday offered a 3.2 per cent increase from March 2027, followed by a 3 per cent rise in March 2028 and 2.8 per cent raise in March 2029.

The APS’s chief negotiator Alison Stott argued the proposed annual increases were above the 2.5 per cent inflation rate forecast for this financial year and every other financial year out to June 2030 in Treasury’s May Budget that appear to be downplaying the effects of the Middle East conflict.

“This proposal delivers guaranteed pay rises while also increasing consistency in pay between agencies and creating more consistent salary advancement across the APS,” she said.

“This pay is part of an overall package of conditions. These are preliminary positions within this package, not agreed outcomes.

“Bargaining is continuing and we will keep working with unions and individual bargaining representatives in good faith.”

But with inflation in August running at an annual pace of 4 per cent, the Labor-affiliated Community and Public Sector Union pushed for a 15 per cent pay rise over three years, made up of 5 per cent annual increases, or the consumer price index if it was higher.

CPSU national secretary Rebecca Fawcett said the union representing Commonwealth public servants wanted pay increases that kept pace with the cost of living, with 18,000 of her members endorsing their pay claim.

“The APS-wide pay offer that has been tabled today falls short of what our members asked for, and what public sector workers deserve,” she said.

“This is now in our members’ hands. They will decide whether it is good enough, and the union will continue to fight for a pay offer that respects these vital workers, and the important services they deliver to the community.”

The Australian Public Service’s offer is based on Treasury inflation forecasts that are now looking outdated with the Reserve Bank of Australia in August forecasting a 3.6 per cent headline inflation rate by December this year.

Its offer was also made as the International Monetary Fund released new forecasts predicting Australia’s consumer price index would finish the year at 3.9 per cent and still be at 3.1 per cent at the end of 2027, or a level above the RBA’s 2-3 per cent target.

Katy Gallagher, the Finance Minister who is also the Minister for the Public Service, is the sole Labor senator for the Australian Capital Territory where Canberra-based Commonwealth public servants live.

She is also a member of the CPSU, with this association declared on her register of pecuniary interests.

The APS proposal is to increase pay levels in 101 out of 110 Commonwealth agencies, including Centrelink staff and some Defence personnel.

The CPSU argued it had been ready to bargain since April, with the APSC only starting negotiations in July.

Treasury estimates the Australian public sector will employ 217,256 people in 2026-27 with general public services expected to cost the taxpayer $32.5 billion this financial year.

Almost a fifth, or 18.2 per cent of that bill, covers government superannuation benefits, and public sector wages are a major expense after grants to the States, the NDIS, defence, aged care, Medicare and hospital funding to the States.

Public servants during wage negotiations are allowed to take protected industrial action provided the Fair Work Commission gives approval and there’s a vote of union members.

Government staff are generally better paid with public administration and safety employees at all levels of government getting an average, full-time salary of $113,350, compared with the wider labour force average of $108,352, based on Australian Bureau of Statistics data average weekly ordinary time earnings.