The Albanese government has put aside almost no money for rising public sector wages even though hiring is booming, and despite already agreeing to a pay deal for 185,000 public servants, potentially exposing taxpayers to a $7.4 billion budget blowout.

The mid-year budget update in December assumes the recent rapid rise in the federal public service wages bill will come to a shuddering halt from mid-2025, with annual salary costs tipped to stay flat at $30 billion until at least 2028.