Australian Public Servants Reject Government's 9% Pay Offer, Demand 15%

Federal public servants have indicated they will vote down a proposed nine percent pay rise over three years, a move that could prolong negotiations and lead to further industrial action. The government's offer, presented Tuesday, includes a 3.2 percent increase in the first year from March 2027, followed by three percent in the second year and 2.8 percent in 2029.

This offer surpasses the projected inflation rates of 2.8 percent for 2026/27 and 2.4 percent for 2027/28, according to the Reserve Bank of Australia's latest forecasts. However, it falls short of the Community and Public Sector Union's (CPSU) demand for a five percent annual raise.

"CPSU members have been clear from the beginning of these negotiations: they want to see pay that keeps up with the cost of living, which recognises the essential work they do every day," said CPSU national secretary Rebecca Fawcett. The union, representing the largest portion of the public service, had initially sought a 15 percent increase and was willing to negotiate certain conditions for it, a request the government deemed unrealistic.

Jeff Lapidos, branch secretary for the Australian Services Union, which includes Australian Taxation Office (ATO) workers, stated that employees would overwhelmingly reject the current offer. "This is a pay offer that holds ATO employees in contempt," Lapidos told AAP, adding that the union would appeal to the Fair Work Commission if a more realistic offer is not presented by the government. He did, however, rule out industrial action.

The government's proposal also includes a plan to realign salary advancement increments across the public service. This would ensure that when an eligible employee moves to the next salary point within their range, the increase would be at least three percent in addition to the annual pay rises.

Chief negotiator Alison Stott, who has been in discussions with union representatives since July, highlighted that the offer is part of a broader package of conditions and that bargaining is ongoing. "This pay is part of an overall package of conditions. These are preliminary positions within this package, not agreed outcomes," Stott said. "Bargaining is continuing and we will keep working with unions and individuals."

Finance Minister Katy Gallagher described the offer as fair and affordable within a constrained fiscal environment. "In a constrained fiscal environment, this is a fair and affordable offer that provides pay rises totalling nine per cent over three years, with additional increases of up to 1.5 per cent for some employees in lower paying agencies," she stated. Agencies will be responsible for funding these pay rises from their existing budgets, which are adjusted annually for inflation.