Labor gives bureaucrats 11.2pc pay rise, but that’s not the scary part

Michael Read and Tom McIlroy

Updated Mar 26, 2025 – 9.17am, first published at Mar 25, 2025 – 7.32pm

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The Albanese government has failed to plug a potential $11.5 billion hole in the budget, putting almost no money aside to fund wage rises for the rapidly expanding public service.

The Australian Financial Review revealed in January that Labor had assumed no growth in public sector wages for the next three years, even though hiring is booming, and the government had agreed to give public servants an 11.2 per cent pay rise in that period.

Michael Read is the Financial Review's economics correspondent, reporting from the federal press gallery at Parliament House. He was previously an economist at the Reserve Bank of Australia and at UBS.

Tom McIlroy is the Financial Review’s Canberra bureau chief based in the press gallery at Parliament House. He was previously the AFR’s political correspondent.